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FOMC minutes next: impact on EUR/USD

FXstreet.com (Córdoba) - Volatility may have not come to an end this Wednesday as the minutes from the latest FOMC are due for release at 18:00GMT. Following Bernanke testimony and his mixed signals about the possibility of tapering the QE program, investors will be looking for further cues as Fed Chairman did leave the door open to acting in the next few meetings.

EUR/USD rallied to the 1.3000 area at the beginning of Bernanke testimony as he warned against premature tightening, but then slumped to a low of 1.2840 as he dialed down the dovish tone afterward.

Valeria Bednarik, chief analyst at FXstreet.com notes that market has been pricing in a possible end in the Fed's bond buying program, and that's the reason behind recent USD strength. "A change in wording, reinforcing the possibility of tapering QE will likely see greenback extending its advance across the board, while diminishing chances of an end for QE, will likely see the currency suffering a strong set back", says Bednarik.

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