After some initial worries earlier in the week, when markets fell back, it would appear that investors have come to the conclusion, that slowly improving economic data in Europe, and continuing uncertainty about the extent of any damage to the US economy caused by the government shutdown, that, on balance, a Fed taper is still less likely this year, irrespective of today’s US GDP and tomorrow’s US employment report. Last nights record close for the Dow bears out that bullish outlook, though most eyes today will also be on the latest rate decision from the European Central Bank, particularly in light of those poor inflation numbers last week, and this week’s growth downgrades from the EU. Pressure has been increasing all week on the ECB to cut rates today with a number of analysts predicting a cut of some sort, either to the headline rate, the deposit rate, or both. To my mind it would be a surprise if the ECB did cut today given its recent history of fiscal conservatism. A hold on rates would not be a surprise, simply because the level of rates is not the problem in Europe, a fact that most people would acknowledge. The press conference is likely to be the more important event with close attention being paid to what Draghi says, and more importantly, what the ECB can do, or intends to do about it. The question and answer session is always illuminating and could well give important clues as to the unanimity of any decision At the same time as Draghi is speaking we get the latest US Q3 GDP numbers with expectations of a fall from 2.7% in Q2 to a figure of around 2%. Weekly jobless claims are also set to fall further from 340k to 335k, still well above where they were prior to the government shutdown. If the GDP numbers come in significantly below market expectations, then that would inevitably raise concerns as to how much worse Q4 is likely to be, given the disruption in October. It would also mean that tapering is much more likely to be delayed, and would thus probably be viewed as a positive, such is the upside down environment we live in these days. Later this evening, another renowned Fed dove, New York Fed President Bill Dudley will be speaking, and given recent speculation about changes to Fed policy with respect to the lowering of the unemployment rate threshold, his speech might receive slightly closer scrutiny than usual for any clues about the Fed’s thinking on that. Also on the calendar today we have the latest Bank of England rate decision, which is expected to pass without any fanfare at all, given the strength of recent economic data. Given Mr Carney’s forward guidance it could well be some time before we get excited about a UK rate decision, though it could be well before 2016, if the economy continues to improve at its current rate. EURUSD – the euro continues to do what it does best and confound expectations of a move lower. The key level remains the 1.3450 level despite last week’s bearish engulfing week, and as such the prospects for a rebound towards 1.3650 remain intact, while the trend line support from the 1.2750 lows holds. A break below 1.3450 could well signal further losses towards the 1.3000 level in the coming weeks. GBPUSD – yesterday’s rebound failed to sustain a move above the 1.6110 level with any conviction. To return towards the 1.6250 area this area needs to be overcome. The support remains at the 1.5890/00. We need to break back through the 1.6110 level to mitigate the downside bias. A break below 1.5900 has the potential to target a move towards 1.5750. EURGBP – while below the 0.8450 area the downside bias remains for a move towards the 0.8330 level. Only a move back above the 0.8450 level would undermine this scenario and retarget the 0.8520 area. USDJPY – trend line resistance at 99.15 from the May highs at 103.75 remains the key obstacle to a move back through the 100 level. Support remains just below the 200 day MA at 97.45 at 97.20 trend line support from the 25th Feb lows. 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