The Euro (EUR) is expected to gain strength, but it still has a major hurdle at 1.1805. Analysts Quek Ser Leang and Peter Chia from UOB Group believe that the chance of reaching 1.1805 will increase if the support level of 1.1675 remains intact. Recently, the EUR surged, hitting a high of 1.1756 and closing at 1.1754, marking a 0.62% rise. Current support is seen at 1.1735 and 1.1715, with a secondary resistance at 1.1780.

Market Observations

Recent market observations have highlighted various currency pairs and gold prices, which are nearing record highs. The EUR/USD has stabilized close to its peak as it awaits US flash PMI data. There’s also commentary on the GBP/USD, noting its struggles to break through certain levels. The FXStreet Insights Team shares updates from financial analysts. This content is intended for informational purposes only and does not serve as a recommendation for trading decisions. Investing in open markets comes with risks, and individuals are responsible for all related losses. FXStreet and its contributors do not provide personalized financial advice and are not liable for any losses stemming from their updates. Due to the recent surge in momentum, we anticipate the Euro will continue to rise against the US Dollar in the coming weeks. The odds of the EUR/USD pair hitting the critical resistance level of 1.1805 are increasing, especially if it remains above the robust support level which is now at 1.1675. The positive outlook for the Euro is driven by differing expectations from central banks, a trend that began to form in late 2025. Minutes from the European Central Bank’s December 2025 meeting indicated a more aggressive approach to tackle ongoing inflation, which remained steady at 2.9% in the latest report. Meanwhile, recent US data has shown signs of slowing down, which favors the Euro’s strength.

Trading Strategy

For example, the disappointing US Non-Farm Payrolls report for December 2025 showed only 155,000 new jobs compared to the expected 190,000, putting pressure on the dollar. The market is eagerly awaiting US flash PMI data today, which could either reinforce the trend of a cooling US economy or contradict our current perspective. This situation is similar to what we experienced in mid-2023 when expectations of ECB tightening surpassed those of the Fed, leading to a significant EUR rally. Given this outlook, buying call options on the EUR/USD pair is a great way to bet on further increases. Traders should look for options with strike prices just below the resistance levels of 1.1780 or 1.1805. Choosing options that expire in the next two to three weeks will align nicely with this forecast. To manage risk and costs, a bull call spread could be an effective strategy. This means buying a call option with a lower strike price, such as 1.1750, while selling a call option with a higher strike price, like 1.1805. This method limits potential profit and loss, providing a controlled approach to trading the expected rise. The critical level to monitor is the 1.1675 support; a clear break below this level would negate the short-term bullish outlook. Additionally, keep an eye on the overall market context, particularly as gold prices inch towards record highs near $5,000. This suggests a possible weakness in the US Dollar, which further supports the bullish case for the EUR/USD. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now