Some modest movement in fiscal cliff negotiations overnight, anticipation of the Fed replacing Operation Twist with outright Treasury purchases and some continued improvement in bond markets in the European periphery are helping boost EUR/USD within the well-worn 1.2650/1.3150 range. Progress toward banking union in the EU is a modest support as well.

It is hard for me to imagine the market having much more upside based on any moves from the Fed. To me, the more major risk would be a disappointment from the FOMC than a dovish surprise.

1.3085/95 is next resistance for EUR/USD with 1.3100 barriers rumored to be in play. 1.3015 is fairly solid support on pullbacks.