US equity markets enjoyed a bit of a reprieve yesterday helped by a positive performance from energy company shares as rising oil prices helped spur a bit of short covering, but the overall concerns remain that some form of military strike could well open up a Pandora's box of spill over problems that could well impact oil supplies in the coming weeks, and in the process drive equity markets lower still, as spiking oil prices, erode growth prospects. As things stand this morning some political divisions over next steps could well delay an imminent military strike but they won't remove the longer term uncertainties about the timing of any such action. Even allowing for last night's rebound Europe's markets still look set to open slightly lower this morning, as politicians on both sides of the Atlantic strive to come to some form of agreement on how to respond to the use of chemical weapons on a civilian population. While financial markets continue to fret about the consequences of any possible military action the reaction of core bond markets has managed to settle down somewhat and UK gilt markets in particular have shrugged off yesterday's reiteration of the Bank of England's forward guidance policy by new governor Mark Carney. It still seems that markets remain unconvinced about the banks' ability to anchor interest rate expectations, but maybe that doesn't matter. As Mr Carney pointed out 70% of loans to households, and 50% to businesses in the UK are linked to the base rate, and the Bank can control that rate, even if they can't control the market rates to the same extent. On the economic docket today as electioneering in Germany gets into full swing, the latest German unemployment numbers for August look set to remain steady at 6.8%, meaning a buoyant employment markets and no recession in Germany, good news for Mrs Merkel, not so much for the rest of Europe though, which continues to struggle. Meanwhile in Italy the pressure on Prime Minister Letta's government eased somewhat after the two coalition parties agreed a deal on an unpopular housing tax, by replacing it with a new levy or services tax. While removing the likelihood of a government collapse this will only defer the problem simply because it still leaves a budget shortfall and will increase the pressure on the government to implement long term structural reforms. Given previous governments track records that is likely to be a lot harder and will probably bring the government into conflict with the EU as well as between each other. While later in the day we get the latest revision to US Q2 GDP and it is expected to be positive to the tune of an upward 2.2% from 1.7%, however concerns remain about the resilience of Q3 given recent data - more fuel to add to the taper fire with jobless claims set to remain steady at around 330k. Given the declines seen in the past month the risk is that the sell-off seen this month could well provide a technical catalyst for a larger roll over to the downside given uncertainty surrounding Syria and a Fed taper program. EURUSD - the euro continues to be capped just above the 1.3400 level but is also finding support just above the 1.3300 area. To delay a move towards the 1.3710 area we need to see a move back below 1.3310. To reopen the downside we need to break below the 1.3150 area and the low four weeks ago at 1.3135 to achieve this. GBPUSD - yesterday's fall saw the pound rebound from 1.5440 falling shy of trend line support at 1.5400 from the 1.4815 lows. Having failed to close below the 200 day MA the risk remains for a move back towards 1.5600 and a retest of the highs at 1.5715 last week. Only below the 1.5400 level argues for a sharper move towards 1.5340. EURGBP - we saw a sharp short squeeze yesterday to 0.8645 before the euro once again slid back before finding support at the 0.8575/80 area. The key level for the primary uptrend remains above the 200 week MA and trend line support at 0.8506 from the 2012 lows at 0.7705. USDJPY - while the cloud resistance at the 98.80 level and the 98.95 trend line resistance from the May highs at 103.75 caps the upside, the bias remains towards the downside. The triangular consolidation continues to unfold and we could well see a return to the base of the consolidation at the 95.80 trend line from the February lows at 91.05. 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.