EUR/USD is close to a two-month high of 1.1804, currently trading around 1.1780 during the Asian session on Tuesday. The 14-day Relative Strength Index (RSI) shows strong demand at 68.89, but there’s a risk if it enters overbought territory.
The pair maintains a bullish trend, staying above the nine-day and 50-day Exponential Moving Averages (EMA), which are both rising. If EUR/USD breaks through the resistance at 1.1800, it could rise further, targeting 1.1870 and 1.1918.
Key Levels And Indicators
If selling pressure comes in, the first support is at the nine-day EMA of 1.1731, followed by the ascending channel boundary at around 1.1720. A drop below these points might test the 50-day EMA at 1.1653 and possibly 1.1589.
In recent currency movements, the Euro has increased by 0.19% against the US Dollar, marking its best performance among major currencies today. A heat map shows other currency shifts with various percentage changes across the market.
This analysis does not offer investment advice, and it’s essential to do your own research before making any financial choices. The information here is for informational purposes and comes with risks.
Outlook And Strategic Considerations
As EUR/USD approaches the key level around 1.1800, we should prepare for a possible breakout in the coming weeks. The upward momentum in the ascending channel indicates a bullish outlook as we reach the end of the year. This strength is supported by the Euro’s recent performance against the US Dollar.
This upward movement is also backed by changing interest rate expectations between the US and Europe. Recent data from early December 2025 showed US inflation cooling to 2.9%, raising speculation that the Federal Reserve might cut rates in the first half of 2026. Meanwhile, Eurozone inflation remains steady at 2.7%, leading the European Central Bank to adopt a cautious approach.
For those trading derivatives, this presents an opportunity to bet on further gains in early 2026. Buying call options with strike prices of 1.1850 or 1.1900, set to expire in late January or February, could allow for profits if the price exceeds the recent high. This strategy limits risk to the premium paid while offering considerable upside if the trend continues.
However, we should keep an eye on the 14-day RSI, which is approaching overbought levels around 69. If EUR/USD fails to break above 1.1804, it may lead to a short-term pullback. To manage this risk, we might consider a bull call spread or set alerts to buy put options if the price drops below the critical support at 1.1731.
Recent data from the Commodity Futures Trading Commission (CFTC) supports this outlook, showing that large speculators have been increasing their net long positions in the Euro. This indicates that institutional investors believe in a stronger Euro, adding confidence to the technical analysis.
Moreover, the general weakness of the US Dollar reinforces this perspective. We are seeing this weakness reflected in the market, with gold reaching record highs and the British Pound hitting ten-week peaks against the dollar. This suggests a broader shift away from the dollar, benefiting the EUR/USD pair as we head into the new year.
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