European investors hoping for a positive lift from positive Chinese data over the weekend were left scratching their heads a little yesterday as Europe's markets struggled to stay afloat for most of the day yesterday, weighed down by uncertainty about events in Syria and the next move on Fed monetary policy. US markets on the other hand had no such uncertainty driving upwards from the opening bell to post their best day in weeks, despite Friday's disappointing payrolls report, shrugging off concerns about tapering and Syria. It could be argued that last night's rebound was driven by the surprise offer to the Syrian regime, to "put its chemical weapons storages under international control, but also have them destroyed subsequently," by Russia could offer the potential to defuse the crisis and offer a way of Syria and the US to both claim some form of victory, while preventing an escalation in the current crisis, if both sides choose to seize it. This morning's Chinese data followed on from the fairly well received weekend trade data by coming in much better than expected. Chinese industrial production for August improved from the 9.7% seen in July coming in at 10.4%, while retail sales data came in slightly better at 13.4%, reinforcing optimism that the recent worries about the Chinese economy may have been overstated. Given this data and the prospect of some form of political solution in the works over Syria we can expect European markets to open higher this morning In Europe the only data of note is Italian Q2 GDP which is expected to come in at -0.2%, and reinforcing the need for significant reforms to reinvigorate the economy. Last night's speech by Italian PM Letta proposed a number of key changes to the way that Europe handles economic shocks including a common Eurozone budget as well as a solidarity fund that euro members can tap use in the event of difficult economic circumstances, in what sounded suspiciously like a "wish list". Given Germany's opposition to any type of burden sharing or common fund I suspect Mr Letta would have better luck with his Amazon wish list than this particular one at the moment. Meanwhile the Italian senate commission currently meeting to determine whether to expel Berlusconi from parliament continues to sit and deliberate a decision against a political backdrop that could bring about the fall of the government if they arrive at the wrong decision so to speak. Berlusconi's supporters have threatened to bring down the government if the commission expels the former PM from parliament due to his conviction for fraud. The ongoing debate about UK house prices looks set to get another airing today after data overnight from RICS showed that the house price balance for August increased from 37% in July to come in at 40% for August, its highest level since November 2006, while the measure that tracks the proportion of new buyers rose to its highest level since 1999, yet we are supposed to believe the Chancellor George Osborne when he says that he is not fuelling a bubble and that his policy is sensible. EURUSD - yesterday's strong move higher is a worry for euro bears with the prospect of a move back towards the recent range highs at 1.3400 a real possibility having managed to break back above the 1.3180 pivot, negating the prospect of a move back to 1.3000 in the short term. For now the next resistance sits at 1.3280, 50% retracement of the 1.3450/1.3105 down move, and then 1.3320. On the downside we can find support back at the 1.3180 pivot. GBPUSD - the sterling trend continues to push higher as we look to test the trifecta of resistance levels around the 1.5740 level. This is where we have the 100 week and 200 week M/A's as well as the June highs, which continue to be tough nuts to crack. As such the potential for pullbacks towards trend line support at 1.5550 from the 1.4815 low remains high. While above here and the low 2 weeks ago at 1.5440 the trend remains positive. Only below the 1.5400 level argues for a sharper move towards 1.5340, and then 1.5260. EURGBP - the failure to break below the 0.8390 area looks to be provoking a short squeeze which could see a move back to the 0.8480/90 area and 200 day MA. While we stay below the 200 week and 200 day MA's the outlook remains bearish. Only a break below the 0.8390 area argues for a move back towards 0.8320. USDJPY - the reversal candle seen on Friday does suggest we could be set for a period f consolidation between 100.30 and the cloud support at 98.50. We need to see a break through 100.30 to retarget the May highs at 103.75. The only concern is the stalling of momentum could see an increasing risk for a move back below 98.80 undermining this scenario and arguing for a test back towards the 97.00 level. 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.