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The EUR/USD rallied to five-week highs on Friday and after a brief setback, the euro managed to close the session at 1.3000, higher against the dollar for the third consecutive day and printing a weekly gain for the third time in a row. EUR/USD also finished November with a net gain of 0.3%.

This week, the Eurogroup finally approved a Greek bailout package and Germany's parliament backed it today. Meanwhile in the U.S., fiscal cliff talks remain in deadlock, weighing on the greenback.

"Now that Greece is 'off the agenda,' the FX market might soon turn towards issues which could put pressure on the dollar," says Ulrich Leuchtmann, analyst at Commerzbank. "This applies to the debate about the U.S. fiscal policy and the Fed."

BK's analyst Kathy Lien believes that "Congress will announce a partial deal at the eleventh hour that involves closing loopholes, limiting deductions and extending Bush era tax cuts for low to middle income households."

Lien states that the market would have to wait until Christmastime to see a deal. "Given the significance of the Fiscal Cliff, severity of the consequences and the fact that up until now, Republicans and Democrats remain miles apart, an 11th hour announcement of a partial deal days and possibly even hours before Christmas is still a likely scenario."

Does The EUR/USD At 1.3000 Stand A Chance?

Amid contradictory headlines about the U.S. fiscal cliff, and a light stream of news from Europe, the EUR/USD seesawed this week. However, the pair holds a positive bias, having risen within the last three days. A decisive break above 1.3020 would confirm the short-term bullish bias, paving the way for a rally toward 1.3100 and even 1.3170. On the other hand, this week's lows in the 1.2880 region should contain dips to keep focus on the upside.

FXstreet.com analyst Richard Lee believes that the "psychological resistance at 1.3150 remains the lone barrier to break higher in the EURUSD." An "upside penetration of the figure would shift focus towards a test of 1.3200," he concludes.

However, according to the FXstreet.com Banks, Experts and Brokers currencies forecast, the EUR/USD's current upward momentum won't last. Mid/long-term perspective remains bearish, according to our latest poll, with 1.2970 as a weekly target, 1.2769 as a monthly and 1.2653 as a quarterly. There is an interesting case in the USD/JPY with experts being bulls, but banks short. Who owns the truth?

The Week Ahead, A Bunch Of Volatility

As usual in the first week of the month, plenty of economic data is scheduled for next week. Central banks will likely create a good majority of the volatility. This is particularly true considering that a total of five central banks will be releasing their interest rate decisions. Besides, headlines regarding the U.S. fiscal cliff situation and the non-farm payrolls report on Friday will also be in focus ahead of the December Fed Meeting. Other important events:

** US Nonfarm Payrolls and Employment report (December 7th)
1. Reserve Bank of Australia (December 4th)
2. Bank of Canada (December 4th)
3. Reserve Bank of New Zealand (December 5th)
4. European Central Bank (December 6th)
5. Bank of England (December 6th)

Finally, late on Friday, Moody's Investors Service downgraded the long-term European Stability Mechanism (ESM) to Aa1 from Aaa and the European Financial Stability Facility (EFSF) to Aa1 from Aaa, both with a negative outlook. The decision should add pressure to EUR/USD bullish trend, as despite the single currency getting a lift from a German vote ratifying the revised Greek deal, the event may not matter at all soon as the single currency approaches a key resistance that could turn the tide.

Just remember that the 1.30/1.31 area is proving to be a huge area of resistance for EUR/USD, which tested but failed to break above it five out of the last six trading days. In this line and according to the Bank of Tokyo-Mitsubishi UFJ's European Head of Global Research Derek Halpenny, the EUR/USD "will continue to be contained by the belief that the Fed will maintain an ultra-loose monetary stance."

The BTMU expert believes that the "pop higher in EUR/USD over 1.3000 that looks imminent should be taken as a good opportunity to sell" as far as "the downward trend in EUR/USD is still intact."

Source: Forex: The EUR/USD Closes November At 1.3000, Now What?