EUR/USD remains above 1.1700 as bullish momentum builds, trading around 1.1720 in Asian hours on Monday. Technical analysis shows a bullish bias with the pair slightly above the ascending channel pattern. The 14-day Relative Strength Index is at 61.63, confirming strong momentum and upward pressure.
The nine-day Exponential Moving Average rises above the 50-day EMA, preserving a bullish bias. EUR/USD may target 1.1800, aligned with the two-month high of 1.1804. A break above this would aim toward 1.1860, with further advances to 1.1918 since June 2021.
Recent Price Movements
Immediate support lies at the nine-day EMA of 1.1713, aligned with the lower ascending channel boundary at 1.1710. A break below the channel could weaken short-term momentum, testing the 50-day EMA at 1.1648 and the three-week low of 1.1589 recorded on December 1.
Today, the Euro strengthened by 0.08% against the US Dollar. It also recorded gains against other major currencies, such as GBP (0.18%), JPY (0.22%), and AUD (0.23%). The table provides a clear percentage change of the Euro against listed currencies. The analysis included input from an AI tool.
We remember the strong bullish momentum that built when the pair crossed 1.1700 years ago, which eventually carried it past the 1.1900 mark in early 2024. As of today, December 22, 2025, the pair is trading around 1.2250 but momentum has stalled ahead of the new year. This pause suggests a need for a fresh catalyst to determine the next major move.
Options Strategy Considerations
Given the recent cooling in US inflation, with the November CPI figure coming in at 2.8%, a dovish Federal Reserve pivot is increasingly likely. Derivative traders could consider buying call options with strike prices above 1.2350 to capitalize on a potential breakout. This strategy offers a defined-risk way to position for a year-end rally if the dollar weakens further.
However, the European Central Bank has signaled its own rate hike cycle is complete, with Eurozone inflation now at 2.5%. This creates a cap on the Euro’s strength, making a range-bound market or a pullback possible in the coming quiet holiday weeks. Purchasing put options with a strike near 1.2100 could serve as a valuable hedge against a failure to break higher.
We are seeing much lower implied volatility now compared to the sharp central bank tightening cycles we experienced back in 2022 and 2023. Back then, EUR/USD fell below parity due to the energy crisis and aggressive Fed action, creating huge swings. The current calmer environment makes option premiums relatively cheaper, presenting an opportunity to build positions for the next directional move in early 2026.
