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As today is 1 May Italy, France and Germany are all on a bank holiday, so we might see a little more volatility as trade volumes may be lower.
Yesterday saw US advanced quarterly gross domestic product figures come in considerably weaker than the markets had expected. The 0.1% growth, rather than the expected 1.2% growth, saw EUR/USD add over 100 pips as the day progressed. The blame for these disappointing figures was quickly attributed to the bad weather that the US had suffered in the early part of the year, but the lingering fear that the US recovery had stuttered slightly was voiced.
Last night saw the FOMC reduce its monthly asset purchasing by $10 billion down to $45 billion. They also stated that this reduction would continue in measured steps, inferring that they would maintain the current pace. If that were to be the case, this could be completed by the end of the year.
The last two and a half months has seen the EUR/USD rate swing between $1.3700 and $1.3900, and has looked in need of a good catalyst to force it out of that range. The $1.3900 region has seen sellers encouraged back before these recent developments, which might be enough to see this current ceiling finally broken, and an ultimate retest of the October 2011 highs of $1.4100.