An extremely disappointing Q1 GDP revision was brushed aside by US markets yesterday, with markets choosing to hang their hats on more recent economic data, which continues to show improvements in patches. Durable goods for May were also disappointing, but services data was surprisingly resilient in June, coming in its best level in four years. This rebound in US markets should translate into a positive European open this morning, though any upside is likely to remain constrained by concerns about events in Iraq. This services data prompted a couple of banks to revise their Q2 forecasts for GDP up to 4%, but given that at least one of these banks had Q1 GDP tracking at 2.8% earlier this year one has to question how much more accurate these new assessments will be. While some of the recent data does point to a better quarter the fact that the quarter was so bad does make you question why the subsequent rebound hasn't been equally as strong, given the data we've seen so far. It also means that the US economy is much further back in terms of resilience and health than markets have been pricing in since March, and it could well take much longer than expected to make up this lost ground. The monthly jobs data has been average at best, while retail sales data has been no better than Q1 thus far. It therefore suggests that these growth upgrades seem somewhat premature on the basis of the data so far. Yesterday's data also reinforces why the Federal Reserve was so cautious in its economic assessment last week, when it downgraded its growth forecast for this year. The concern still remains that the central bank is underestimating the inflation risks after last week's strong CPI number and recent price rises in some of the manufacturing surveys. Given recent rises in oil prices, US crude prices are up over 14% from their lowest point in January this year, the risk is that this could filter through into higher prices in the coming weeks and months. The Fed's preferred measure of inflation, PCE for May is expected to rise from 1.4% to 1.5%, but could show a bigger rise, reinforcing concerns that the Fed is underestimating the inflation risk. On the consumer front personal income and spending data is expected to show rises of 0.4%. Weekly jobless claims are expected to come in at 311k. In the UK the Bank of England governor Mark Carney at the latest Financial Stability Review is expected to announce some new measures to curb risky mortgage lending, as concerns about a UK housing bubble continue to resonate. EURUSD – the price action continues to compress below the broader resistance below 1.3670, but above last Friday's low at 1.3560. Only a move beyond 1.3675 argues for a move back towards 1.3780. We also have key trend support from the 2012 lows at 1.2045, which now comes in just above 1.3465. GBPUSD – the pound tried to push beyond 1.7000 yesterday but found it difficult to sustain with the air remaining a little thin for the moment. We could well see a move back towards 1.6910, after closing below 1.7000 yesterday. A drop below 1.6910 sees major support all the way back at the 100 day MA at 1.6725. The risk remains for a move towards 1.7330 the 50% retracement of the decline from the 2007 highs at 2.1160 and the lows at 1.3500 in 2009. Ideally we need to see a monthly close above 1.7000 for this to unfold. EURGBP – we appear to be forming a short term base just above the 0.7960 area which continues to hold the downside. As such we remain at risk for a pullback towards the 0.8085 area if we sustain a move above 0.8035. The pressure remains on the downside while we remain below trend line resistance from the March highs sitting just below the 0.8110 level, with a longer term target at 0.7880. USDJPY – bounced off 200 day MA support at 101.60 yesterday and as such still in range, with a move back through the 200 day MA needed to retarget the range trade lows of this month near 101.00. The range highs remain anywhere below the 103.00 area and last weeks high at 102.75. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.