EUR/USD Outlook: Bullish Sentiment Persists as 1.1820 Emerges as Key Resistance

The EUR/USD pair hovers around 1.1755, maintaining its positive momentum through Friday’s European morning session. Central bank policies and geopolitical factors continue to shape the pair’s direction, with technical structures supporting the uptrend. Traders should monitor 1.1820 as the primary resistance level, while 1.1655 provides immediate support.

Policy Backdrop Bolsters Euro Strength

The European Central Bank’s decision to hold rates steady at its December meeting signaled a shift in tone. ECB President Christine Lagarde’s emphasis on a flexible, “meeting-by-meeting” approach indicated the bank isn’t rushing toward additional easing, which has helped underpin EUR against its American counterpart. Market participants are now pricing in a possibility of unchanged rates extending well into 2026.

Meanwhile, developments on the US side present a contrasting picture. President Donald Trump’s recent commentary about appointing a dovish successor to outgoing Fed Chair Jerome Powell—whose mandate concludes in May—has raised questions about monetary policy independence. Trump’s preference for lower rates and his expectation that the next Fed leadership maintain accommodative settings could weaken USD demand and provide tailwinds for the major pair.

Technical Setup Confirms Bullish Vibe

The EUR/USD pair’s technical structure reinforces the positive narrative. Trading at 1.1755, the pair comfortably sits above the 100-day exponential moving average (EMA), which slopes upward from 1.1635. This positioning preserves the medium-term uptrend and signals that dips remain buyable opportunities.

Momentum indicators reflect strengthening conviction. The Relative Strength Index (RSI) has climbed to 59.8, demonstrating rising momentum without entering overbought territory—a healthy signal for sustained advances. The price action sits marginally above the Bollinger Band’s middle band near 1.1738, while the bands themselves have compressed, suggesting volatility is contracting following the recent recovery phase.

Key Levels and Trading Outlook

The upper Bollinger Band at 1.1820 represents the immediate upside target. A daily close above this level would open the door for further appreciation. Conversely, a retreat beneath the middle band would risk exposing the lower band near 1.1655, which serves as a critical support floor.

The confluence of supportive policy dynamics and constructive technical positioning suggests the pair maintains its bullish mood for the foreseeable term. Traders appear positioned to buy weakness above the EMA until volatility expands and the technical picture shifts.