EUR/USD Technical Outlook: Resistance Looms Near 1.1820 as Bullish Pressure Persists

EUR/USD strengthens toward 1.1755 during Friday’s early European trading, supported by a sustained upward technical setup. The pair remains firmly positioned above its 100-day exponential moving average, with RSI momentum climbing to 59.8—indicating building strength without reaching overbought levels. Traders should monitor 1.1820 as the first significant resistance ceiling, while 1.1655 marks the initial support floor on the downside.

Macroeconomic Tailwinds for the Currency Pair

The fundamental backdrop continues to favor EUR/USD strength on multiple fronts. The European Central Bank’s unchanged policy stance at its December meeting signaled a more cautious approach to rate cuts, with ECB President Christine Lagarde reiterating a flexible “meeting-by-meeting” framework. Market participants increasingly expect rates to stabilize through 2026, providing a floor for Euro valuations.

Across the Atlantic, speculation regarding a dovish Fed leadership transition next year weighs on dollar sentiment. With Fed Chair Jerome Powell’s mandate expiring in May, market chatter around a replacement candidate has gained intensity. President Trump has publicly stated preferences for a Fed chief who will maintain accommodative policy, raising questions among financial policymakers about institutional independence. Such rhetoric typically encourages capital to seek alternatives to dollar assets, benefiting pairs like EUR/USD.

Technical Framework: The Path Forward

From a charting perspective, EUR/USD demonstrates classic bullish structure. The 100-day EMA at 1.1635 slopes upward and serves as price support; the pair’s position above this moving average validates the medium-term uptrend. The Bollinger Bands configuration reveals narrowing volatility, with the middle band sitting at 1.1738. Price currently trades above this mid-level, while the upper band at 1.1820 represents the near-term ceiling.

Breaking through 1.1820 on a daily close would open the door to extended gains, whereas slipping back beneath the Bollinger middle band could invite a test of the lower band near 1.1655. Momentum indicators remain constructive, suggesting that dips present buying opportunities until broader volatility expansion materializes.

The technical setup, combined with supportive monetary policy divergence between the ECB and Fed, keeps the EUR/USD pair positioned for potential upside continuation toward and beyond its immediate resistance level.