UOB analysts reported that EUR/USD rose sharply and is overbought on an intraday basis. They said the pair may still rise towards 1.1945 before moving into consolidation.
For the next 1–3 weeks, UOB sees further upside if EUR/USD records a daily close above 1.1945. If that happens, the next target level is 1.1980.
Support is identified at 1.1840. UOB said the positive scenario remains in place while the pair stays above 1.1840.
The article notes it was produced with help from an artificial intelligence tool and reviewed by an editor. It is attributed to the FXStreet Insights Team.
We are seeing a familiar setup to what we saw in 2025, where momentum is building for a push higher in the EUR/USD. Recent data showing Eurozone core inflation holding at a stubborn 2.2% last week lends credibility to this upward bias. This contrasts with the latest US wage growth figures, which cooled slightly more than expected, suggesting the Federal Reserve may have less urgency to be hawkish.
For traders, this suggests positioning for a move towards the 1.1980 target mentioned in last year’s analysis. Buying call options with a strike price just above the key 1.1945 level, perhaps at 1.1950, for March expiration would be a direct way to play this potential breakout. This strategy offers upside exposure while clearly defining the maximum risk to the premium paid.
Given that the rally feels sharp and conditions could be overbought, a more conservative strategy like a bull call spread is also attractive. We could buy a 1.1900 call and sell a 1.2000 call, which would lower the initial cost of the trade. This approach profits from a rise but also protects us if the rally stalls before making a much larger move.
The 1.1840 level must be watched closely as our strong support. A decisive break below this price would signal that the upward momentum has failed, and any bullish positions should be reconsidered or hedged. This was our line in the sand in 2025, and it remains our key defensive level today.
We can look back at the fourth quarter of 2024, when similar overbought readings led to a brief two-week pause before the uptrend resumed with force. That historical action suggests that a bit of consolidation below 1.1945 should not necessarily be seen as a failure of the trend. It may just be the market gathering strength for the next leg up.
