EURUSD Breakout

The US Dollar was bearish against most of its major pairs on Tuesday with the exception of the JPY. On the US economic data front, Markit's US Manufacturing Purchasing Managers' Index remained at 56.7 on month in the November final reading (as expected), in line with the November preliminary reading. Finally, Construction Spending rose 1.3% on month in October (+0.8% expected), compared to a revised -0.5% in September.

On Wednesday, the Mortgage Bankers Association's Mortgage Applications data for the week ending November 27th is expected. Automatic Data Processing's Employment Change for November is expected to show that 430K jobs were added on month, compared to 365K jobs added in October. Finally, the Federal Reserve's Beige Book is expected.

The Euro was bullish against all of its major pairs. In Europe, Research firm Markit has published final readings of November Manufacturing PMI for the Eurozone at 53.8 (vs 53.6 expected), for Germany at 57.8 (vs 57.9 expected), for France at 49.6 (vs 49.1 expected) and for the U.K. at 55.6 (vs 55.2 expected). Separately, the European Commission has posted Eurozone's November CPI at -0.3% on month (as expected). Furthermore, the German Federal Statistical Office has posted November jobless rate at 6.1% (vs 6.3% expected). Also, OECD sees 2020 Euro Area GDP at -7.5% (vs -7.9% previously) and at +3.6% in 2021, vs +5.1% previously. It sees U.S. GDP at -3.7% in 2020, vs -3.8% previously, and at +3.2% in 2021, vs +4% previously. World GDP is expected at -4.2% in 2020, vs -4.5% previously, and at +4.2% in 2021, vs +5% previously.

The Australian dollar was bearish against most of its major pairs with the exception of the JPY and USD.

Tuesday's largest gainer was the EURUSD which rallied 146 pips. From a technical perspective, the pair broke above a consolidation in place since July. As long as 1.20 acts as support, look for a continuation of the uptrend towards our next target resistance level of 1.2265 and 1.2415 in extension. A break below 1.20 could pressure the pair back into a consolidation.

Source: GAIN Capital, TradingView

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