The Euro (EUR) is expected to rise with increased momentum, though the major resistance of 1.1805 remains out of reach at present. Analysts Quek Ser Leang and Peter Chia from UOB Group suggest the potential of reaching 1.1805 will grow as long as support at 1.1675 holds.
Recently, EUR rose sharply, peaking at 1.1756 and closing at 1.1754, a 0.62% increase. Current support levels are positioned at 1.1735 and 1.1715, with a secondary resistance at 1.1780.
Market Observations
Market observations include remarks on other currency pairs and gold prices near record highs. The EUR/USD steadied near its peak, anticipating US flash PMI data. There was coverage of the GBP/USD and its inability to break past specific thresholds, among other market updates.
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Based on the sharp increase in upward momentum, we expect the Euro to continue rising against the US Dollar in the coming weeks. The likelihood of the EUR/USD pair reaching the major resistance level of 1.1805 is increasing. This bullish outlook remains valid as long as the currency pair holds above the strong support level, which has now moved up to 1.1675.
This positive sentiment for the Euro is being fueled by diverging central bank expectations, a trend we observed taking shape in late 2025. The European Central Bank’s December 2025 meeting minutes suggested a more hawkish stance to combat persistent inflation, which held firm at 2.9% in the last reading. In contrast, recent US data has shown signs of a slowdown, creating an environment that favors Euro strength.
Trading Strategy
For instance, the weaker-than-expected US Non-Farm Payrolls report for December 2025, which came in at just 155,000 new jobs against a forecast of 190,000, has weighed on the dollar. The market is now keenly awaiting the flash US PMI data later today, which could either confirm this trend of US economic cooling or challenge our current view. This dynamic is reminiscent of the market action we saw back in mid-2023, when expectations of ECB tightening outpaced the Fed, leading to a significant rally in the Euro.
Given this outlook, buying call options on the EUR/USD pair is a direct way to position for further upside. Traders could consider options with strike prices just below the 1.1780 or 1.1805 resistance levels. Opting for expirations in the next two to three weeks would align well with the timeframe of this forecast.
To manage risk and premium costs, a bull call spread might be an effective strategy. This would involve buying a call option with a lower strike price, such as 1.1750, and simultaneously selling a call option with a higher strike price, like 1.1805. This strategy defines the maximum potential profit and loss, offering a controlled way to trade the expected rise.
The key level to watch is the 1.1675 support; a decisive break below this would invalidate the near-term bullish perspective. Also note the broader market context, with Gold pushing toward record highs near $5,000. This suggests a potential underlying weakness in the US Dollar, which further supports the case for a higher EUR/USD.
