EUR/USD Rally Continues: What's Pushing the Pair Above 1.1800?

EUR/USD strength holds near 1.1755 as euro-to-usd conversion attracts buyers in early Friday trading. The pair maintains ground above the crucial 100-day moving average, with improving momentum indicators suggesting room for further gains. Traders should watch the 1.1820 level as the next critical resistance; a break above would open the door to extended upside. On the downside, 1.1655 serves as the key support zone.

Why the Euro Is Finding Buyers Right Now

The European Central Bank’s latest decision to keep rates unchanged has shifted market sentiment. Rather than signaling weakness, the ECB’s cautious stance—emphasizing data-dependent decisions rather than pre-committed paths—has actually supported the Euro. ECB leadership, including President Christine Lagarde, made clear that 2026 rate expectations remain uncertain and hinge entirely on incoming economic data.

Meanwhile, across the Atlantic, US monetary policy is entering uncharted territory. With speculation growing that incoming administration officials may influence Federal Reserve direction—including potential successor selections to Fed Chair Jerome Powell before his May departure—the Dollar faces headwinds. Market participants are pricing in the possibility of a more dovish Fed, which naturally benefits higher-yielding currencies like the Euro.

The Chart Setup: EUR/USD Technical Picture

The daily timeframe tells a compelling story for euro-to-usd buyers:

• Trend Confirmation: Price trading above the 100-day EMA at 1.1635 signals medium-term strength remains intact
• Momentum Health: RSI at 59.8 shows improving buying pressure without reaching overbought extremes—plenty of room to run
• Volatility Squeeze: Bollinger Bands have narrowed after the recent recovery, suggesting a breakout could be imminent
• Resistance Zone: The upper band near 1.1820 caps the immediate upside, though a daily close above this level would confirm the bullish bias and invite fresh buyers

The middle Bollinger Band at 1.1738 acts as a minor support; a breakdown below this would invite a test of the lower band around 1.1655.

What Traders Should Watch

As long as the pair holds above its 100-day EMA, the path of least resistance favors the upside. Technical conditions support buying dips into support levels, particularly if volatility expands and triggers breakout trades above 1.1820. The combination of supportive ECB rhetoric, potential Fed dovishness, and positive technical momentum creates a favorable setup for EUR/USD strength to persist.