EUR/USD Technical Forecast: Bullish Setup Intact as Resistance Looms Near 1.1820

EUR/USD edges higher to 1.1755 in Friday’s early European hours, maintaining positive momentum. The currency pair continues to find support above its 100-day exponential moving average, while technical indicators suggest room for further appreciation. The relative strength index (RSI) sits at 59.8, reflecting steady upward momentum without entering overbought zones.

Technical Setup Points to Continued Strength

The 100-day EMA resides at 1.1635 and slopes upward—a constructive signal for medium-term bullish positioning. With price trading comfortably above this key moving average, the technical foundation remains supportive for buyers. The Bollinger Bands tell an interesting story: EUR/USD trades just above the middle band at 1.1738, while the narrowing bands suggest volatility compression following the recent recovery phase.

On the resistance side, traders should monitor 1.1820, where the upper Bollinger Band currently sits. A daily close above this level would likely trigger additional upside momentum, potentially opening the door to fresh gains. Conversely, a pullback that dips below the middle band around 1.1738 would shift focus toward the lower support zone near 1.1655.

Macroeconomic Tailwinds Supporting EUR Strength

The European Central Bank’s December policy decision maintained rates unchanged, with ECB President Christine Lagarde signaling a methodical, data-driven approach rather than committing to a pre-set rate path. Market consensus suggests rates could remain stable through 2026, providing underlying support for the Euro.

Meanwhile, developments on the US side may add additional lift to EUR/USD. Speculation around President Donald Trump’s potential Federal Reserve successor—particularly the possibility of naming someone more accommodative than current Fed Chair Jerome Powell—has raised questions about future monetary policy direction. Trump’s public preference for lower interest rates could weigh on the Dollar’s relative appeal, creating favorable conditions for the major pair and other USD pairs like NZD/USD in similar fashion.

What Traders Should Watch

The technical picture favors a buying-the-dips strategy as long as support levels hold. The combination of price action above the 100-day EMA, improving RSI momentum without overbought extremes, and a constructive Bollinger Band setup creates a favorable risk-reward for breakout attempts above 1.1820.