Last night the US Federal Reserve confirmed it would maintain its current policy of $85 billion worth of monthly stimulus. This was exactly what markets had anticipated, although the tone of the comments accompanying this news was less dovish than expected.
Over the last month a number of issues have affected the US economy, including both economic data releases and the government shutdown. This had been interpreted as more likely to delay any tapering, but the Fed has not given any indication that this is the case.
On this side of the Atlantic the EU has also released economic data which has altered the balance. EU unemployment has jumped to 12.2% after being expected to remain unchanged at 12%. This points towards a weaker economic picture for European markets and therefore a weakening of the euro.
Having spent four days flirting with the idea of properly breaking through the $1.38 level, EUR/USD has now had a change of heart and dropped back down to the $1.3650 region. This might be a setback for those anticipating higher levels, but the pair has a lot further to fall if it wants to break the longer-term support.