The EUR rallied to a two-week high against the dollar on Tuesday as solid demand at European debt auctions soothed worries about the debt crisis and prompted investors to cover short positions in the single currency on increased risk appetite.

The EUR erased brief losses seen in the wake of a weak German ZEW investor sentiment survey, which renewed concerns about the negative effects of the euro zone debt crisis on the wider economy. The EUR is currently trading higher against the USD by nearly 120 pips at 123.45. It is also trading higher against JPY and GBP.

Tomorrow, forex traders cannot afford to overlook, a batch of data is expected from the leading economies. Both the Europe CPI and U.S. Building Permits will be released at 9:00 GMT and 12:30 GMT respectively, promising an extremely volatile trading day. Traders should take advantage of this unique opportunity and use the volatile market in order to capitalize profits.