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EUR/USD long plays are working wonders in a market totally committed to buy the pair, as can be observed since the breakout of $1.34, which has led to a some serious USD depreciation, taking the rate as high as $1.3580.

Surprisingly, most of the gains were produced even before the big risk events from yesterday in the U.S., an indication that the market is clearly favoring a one-way street move for now, not even bothering to await the FOMC, as EURphoria builds up.

U.S. equities, however, failed to perform as usual, partly owed by a surprisingly low U.S. Q4 GDP, which showed a -0.1%, joining the recent growth read-outs from the EU, U.K. and Japan, all confirming the contraction in the last quarter of the last year.

However, as Kathy Lien, co-founder at BK Assset Management, says: "The chance that the contraction in Q4 will turn into a recession in 2013 is extremely low especially because spending, which is the most important component of GDP increased. The U.S. economy is still on track for a continued recovery this year.

After the sour sentiment left by the GDP release, a rosier than expected U.S. ADP employment report reminded traders of the potential for some upside risk for Friday's non-farm payroll numbers.

However, since the FOMC statement communicated to the market that it's 'easing as usual' in the Fed, the USD failed to recover much ground, with metals being boosted, normally a fairly good indication of poor sentiment towards a QE3 termination.

Philip Marey, U.S. strategist at Rabobank, expects "the U.S. economy to re-accelerate in the second half of the year, after the fiscal deadlines have passed and the impact of the payroll tax hike has faded," thus "we may see increasing speculation on the termination of QE3 as we approach the end of the year" he notes.

On the European calendar today, after the 7-month print in Germany's consumer spending, today's Germany retail sales report "bodes well" says Ms. Lien. However, she is reserved on the German unemployment, "which could climb because greater job losses were seen in the manufacturing sector", she adds.

"It may be a tough call, but given the bullish bias in the euro, as long as there is a small improvement in both reports or very little deterioration, the EUR/USD could sustain its gains", Kathy says.

From a more technical angle, in-house chief technical Valeria Bednarik supports the EUR/USD rally, saying that "the bullish trend seems here to stay." She recommends to patiently wait for opportunities to buying on dips. Valeria tips "key support is now former resistance at $1.3480 price zone, past year high."

Source: EUR/USD, Buyers Stay Firmly Committed