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EURUSD (1.1379): The EURUSD currency pair managed to break out from the falling trend line. A brief decline back to the breakout level saw price action closing with a doji followed by a bullish upside breakout. The price action indicates near-term upside as the EURUSD could be seen testing the resistance level at 1.1435 in the near term. A breakout above 1.14350 is required for price action to continue the upside and potentially shift the trend. Alternately, failure to break the resistance level could allow the EURUSD to maintain its sideways range.

The U.S. dollar was seen trading weaker on Tuesday. The weakness in the greenback comes ahead of today's Fed meeting. However, the USD was seen managing to recover some of the losses later in the day.

Economic data on the day showed that the German Ifo business climate fell to 101.0. This missed estimates of 101.8 and was down from 102.0 previously.

Canada's manufacturing sales were down 0.1% on the month missing the median forecasts and slowed from the 0.2% increase the month before. In the U.S. the building permits rose modestly to 1.33 million which beat the forecasts while housing starts rose 1.26 million on the month.

The UK's inflation report for November is due today. Econplans for the next year.omists polled forecast that inflation might have eased to 2.3% on an annualized basis in November. This marks a somewhat slower pace of increase in inflation compared to the 2.4% that was registered in October. Core inflation is expected to also ease to 1.8%, down from 1.9% previously.

The NY trading session will see Canada's inflation data coming out. Headline inflation is forecast to fall 0.1% after rising 0.3% on the month previously. The annualized inflation is expected to remain at 2.1%.

Later in the day, the housing data continues with the release of the existing home sales report. Existing home sales are forecast to rise just 5.2 million on the month down from 5.22 million previously.

The much-awaited Fed meeting will be underway as the FOMC will be hiking interest rates today to 2.50%. The central bank will also be releasing its economic projections and rate hike plans for the next year.

Following the Fed meeting, later in the overnight session, New Zealand will be releasing its quarterly GDP data. GDP is forecast to rise 0.6% in the third quarter, marking a slower pace of increase.

The EUR/USD could complete the wave A (blue) at the resistance trend line (orange) and make a bearish bounce for a wave B. Price is then expected to bounce back up again at 1.13-1.1325 support for a wave C which aims for the Fibonacci levels of wave Y vs W.

The EUR/USD has either completed a wave 3 (green) or a wave 5, which means that price could make a bearish ABC (red) correction soon. A bullish break indicates that price is still in an extended wave 5 (green) whereas a bearish break could start the wave C (red).

Pivot (invalidation): 5.3560

Our preference Short positions below 5.3560 with targets at 5.3210 & 5.3000 in extension.

Alternative scenario Above 5.3560 look for further upside with 5.3780 & 5.3940 as targets.

Comment The RSI lacks upward momentum.

Pivot (invalidation): 0.7175

Our preference Long positions above 0.7175 with targets at 0.7215 & 0.7230 in extension.

Alternative scenario Below 0.7175 look for further downside with 0.7160 & 0.7150 as targets.

Comment The RSI is bullish and calls for further upside.

Pivot (invalidation): 1.3445

Our preference Long positions above 1.3445 with targets at 1.3495 & 1.3525 in extension.

Alternative scenario Below 1.3445 look for further downside with 1.3420 & 1.3395 as targets.

Comment The RSI is mixed to bullish.

Pivot (invalidation): 0.9940

Our preference Short positions below 0.9940 with targets at 0.9895 & 0.9885 in extension.

Alternative scenario Above 0.9940 look for further upside with 0.9955 & 0.9970 as targets.

Comment The RSI is below its neutrality area at 50%

Pivot (invalidation): 112.60

Our preference Short positions below 112.60 with targets at 112.00 & 111.80 in extension.

Alternative scenario Above 112.60 look for further upside with 112.85 & 113.05 as targets.

Comment The RSI shows downside momentum.

Pivot (invalidation): 1.2625

Our preference Long positions above 1.2625 with targets at 1.2705 & 1.2735 in extension.

Alternative scenario Below 1.2625 look for further downside with 1.2590 & 1.2555 as targets.

Comment The RSI is bullish and calls for further upside.

Pivot (invalidation): 1.1365

Our preference Long positions above 1.1365 with targets at 1.1405 & 1.1420 in extension.

Alternative scenario Below 1.1365 look for further downside with 1.1350 & 1.1330 as targets.

Comment The break above 1.1365 is a positive signal that has opened a path to 1.1405.