EUR\/USD is nearing the two-month high at 1.1804, trading around 1.1780 during Asian hours on Tuesday. The 14-day Relative Strength Index (RSI) indicates strong demand at 68.89, but risks loom if overbought conditions develop.<\/p>\n
The pair sustains its bullish stance, holding above the nine-day and 50-day Exponential Moving Averages (EMA), which are trending upwards. Breaking through the resistance at 1.1800 could propel EUR\/USD further, with targets at 1.1870 and 1.1918.<\/p>\n
If downward pressure initiates, the primary support sits at the nine-day EMA of 1.1731, followed by the boundary of the ascending channel around 1.1720. A decline below these levels may challenge the 50-day EMA at 1.1653 and eventually test 1.1589.<\/p>\n
In currency movements, the Euro gained 0.19% against the US Dollar, reflecting its strongest position among major currencies today. The heat map displays other currency interactions, showing dynamic percentage changes across the market.<\/p>\n
This analysis doesn’t make any investment recommendations, and it is vital to perform thorough research before making any financial decisions. The information herein is for informational purposes and may involve risks.<\/p>\n
Given the EUR\/USD is testing a significant barrier near 1.1800, we should prepare for a potential breakout in the coming weeks. The upward momentum within the ascending channel suggests a bullish bias heading into the end of the year. This technical strength is further supported by the Euro being the strongest performing major currency against the US dollar recently.<\/p>\n
This move is fundamentally supported by shifting interest rate expectations between the US and Europe. Recent data from early December 2025 showed US inflation cooling to 2.9%, fueling bets that the Federal Reserve could cut rates in the first half of 2026. In contrast, Eurozone inflation has remained stickier, with the latest reading at 2.7%, prompting the European Central Bank to maintain a more cautious tone.<\/p>\n
For derivative traders, this creates an opportunity to position for further upside in early 2026. Buying call options with strike prices of 1.1850 or 1.1900, expiring in late January or February, would allow us to capitalize on a break above the two-month high. This strategy defines our risk to the premium paid while offering significant upside potential if the trend continues.<\/p>\n
However, we must watch the 14-day RSI, which is nearing overbought territory around 69. A failure to break above 1.1804 could trigger a short-term pullback. To manage this risk, we could consider a bull call spread or set alerts to purchase put options if the price breaks below the key support at 1.1731.<\/p>\n
Recent data from the Commodity Futures Trading Commission (CFTC) confirms this sentiment, as we have seen large speculators increasing their net long Euro positions over the past several weeks. This indicates that institutional money is aligning with a stronger Euro thesis. This positioning adds a layer of confidence to the technical picture we are seeing.<\/p>\n
The broader market context of general US dollar weakness further validates this outlook. We are observing this weakness across the board, with gold hitting record highs and the British Pound trading at ten-week highs against the dollar. This suggests a systemic shift away from the dollar, providing a tailwind for the EUR\/USD pair as we move into the new year.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD nears two-month high; strong RSI suggests demand, but overbought conditions could trigger downside risks.<\/p>\n","protected":false},"author":62,"featured_media":16964,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-43431","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=43431"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43431\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16964"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=43431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=43431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=43431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}