If you were to gauge market reaction to last night's Fed minutes then it would not be unreasonable to think that markets were looking at the potential for tapering to start next month. A spike in 10 year US treasury yields by nearly 10 basis points to 2.80% and a fall in US stock markets would appear to suggest that investors remain concerned by just such an event, and as such we can expect to see a similarly negative start in Europe this morning. The only problem with that conclusion is that last night's minutes are over three weeks old and pre-date outgoing Chairman Ben Bernanke's comments of a couple of days ago and incoming Fed Chief Janet Yellen's comments of last week. Bernanke stated that policy would remain easy as long as needed and the Fed would only begin to taper bond buying once it is assured that labour market improvements looked sustainable. Given those comments can one more good payrolls report be enough to ensure that. It seems doubtful but I guess we'll know a month from now. It probably hasn't helped that St. Louis Fed chief James Bullard has sent markets mixed signals in the past few days; however it is hard to escape the conclusion that a Fed taper in December still remains an outlier even at this stage. The odds might shift even more towards a December taper if subsequent economic data were to suggest a significant improvement across the board in economic data, but with inflation continuing to slide lower to coin an earlier comment from Mr Bullard, "what's the rush." Given this uncertainty it therefore is probably prudent for some cashing out to be done on the recent rally as we head towards the Thanksgiving break next week, and this more than anything is probably what is driving the current bout of profit taking, along with a disappointing HSBC Chinese manufacturing PMI this morning, after this week's record highs. Back in Europe the euro took a dive yesterday on chatter that the ECB was considering negative deposit rates in order to help stimulate the recovery in Europe. This speculation coming so soon after this month's rate cut would appear to suggest that policymakers remain extremely concerned about the lack of growth, particularly in France after last week's slip back into contraction in Q3. Such a move would be fiercely resisted by Germany and Bundesbank chief Jens Weidmann, judging by his comments yesterday, and given the fragility of the European banking system such a move could actually cause more problems than they would solve. These economic growth concerns could well be magnified further today if the latest flash manufacturing and services PMI's for France show continuing weakness today. Manufacturing is expected to improve from 49.1 to 49.5, while services are expected to improve marginally to 51. Separately German and European manufacturing and services PMI's are also expected to improve, from their positive October numbers, with the European composite expected to tick up to 52. Back in the US the latest weekly jobless claims are expected to come in at 335k, down slightly from last week's 339k, while the latest Philadelphia Fed survey for November is expected to slip back to 16 from 19.8 in October. In further signs of slowing inflation producer prices are expected to decline 0.2% for October. EURUSD - yesterday's rally to 1.3575 and then sharp move below the 1.3460 trend line from the 1.3300 low could well see a move back towards the post ECB rate cut low in the short term. Any subsequent move below that then retargets the 1.3000 level flagged up by the bearish engulfing week a few weeks ago. Only above the 1.3620 negates this overall view. GBPUSD - we've seen three doji's in a row on the daily charts, which continue to point to indecision as to the overall long term direction. Pushing up to 1.6180 yesterday we remain stuck in our broad range of price action with support at the 1.5880/90 area and resistance at 1.6250/60. Its going to take something substantial to break the pound out of its recent range, with the bias remaining to the downside. Only a sustained break below 1.5900 has the potential to target a move towards 1.5750. EURGBP - yesterday's sharp fall has continued to find some level of support just above the low this month. The euro continues to look weak but remains in broader range with support around the lows this month at 0.8320 and resistance at 0.8470. The risk remains for a move below the 0.8320 level towards 0.8280, 50% retracement of the entire up move from the 2012 lows and the high this year. USDJPY - the US dollar has finally pushed beyond the September highs at 100.60, but it's been slow progress despite US long term yields firming up substantially yesterday. Behind 100.60 we then have 103.75 which is the next obstacle to a move to 105.00. If the US dollar breaks below the 99.20 level we could see a deeper fall towards 98.50. Support remains just below the 200 day MA at 97.80 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.