Forex: EUR/USD rallies back to highs after US Chicago PMI (Barcelona) - The EUR/USD started its easing process ahead of the release of the US consumer spending and the NY session, coming to as low as 1.2968. Oversold conditions made the market pull back, fully retracing losses and now rallying back to its highs after the release of the US Chicago PMI expansionary but disappointing figure at 50.4 in November.

Also, RBC cut the US Q4 GDP (YoY) growth estimate from 1.0% to 0.2% based on weakening consumer spending in Q4 and the effects of Hurricane Sandy. Market consensus points to 1.7%. The EUR/USD rally has reached 1.3022 session high already, six pips away from the daily high at 1.3027, and keeps on pressing higher. Investors will spend the rest of the trading day looking for headlines about the “fiscal cliff”.

“Both 1 and 4h chart studies are in the positive territory and supportive for fresh bullish action towards 1.3070/1.3100, initial target”, wrote Windsor Brokers analyst Slobodan Drvenica, poiting to initial support at 1.3000 ahead of 1.2968 (yesterday’s intraday low / 55 day EMA) and 1.2940 (spike low / double bottom).