EUR\/USD remains buoyant, trading around 1.1790, after reaching a three-month peak of 1.1808. The 14-day Relative Strength Index is at 71, indicating potential overbought conditions that could limit immediate gains.<\/p>\n
The nine-day Exponential Moving Average (EMA) crosses above the 50-day EMA, reinforcing a bullish tendency. If the 1.1800 resistance level is surpassed, the pair might target 1.1880 and 1.1918, the highest level since June 2021.<\/p>\n
The immediate support is found at the nine-day EMA of 1.1745. A breach of this could test the 50-day EMA near 1.1660, with further declines possibly revisiting the three-week low of 1.1589 recorded earlier.<\/p>\n
The pair moves within an ascending channel, and the market outlook remains favourable as the long-term EMA rises. However, momentum indicators suggest that a consolidation phase could occur before the trend resumes.<\/p>\n
This analysis utilises AI assistance to provide technical insights and should be taken as informational, not as a trading recommendation.<\/p>\n
The EUR\/USD is testing a three-month high around 1.1808, which presents a critical decision point for us. While the upward trend within its channel is strong, the 14-day Relative Strength Index is now at 71, signaling overbought conditions. This often suggests a pause or a pullback before the trend can resume.<\/p>\n
This technical tension reflects market uncertainty over central bank policy heading into 2026. After the Federal Reserve held rates steady in their December 17 meeting, recent US inflation data for November came in at 2.5%, supporting their cautious pause. Meanwhile, with Eurozone inflation still slightly higher at 2.8%, the European Central Bank has been slower to signal rate cuts, providing underlying support for the Euro.<\/p>\n
For those of us who believe the bullish momentum will overcome the overbought signal, buying call options with strike prices above 1.1810 could be a viable strategy. This allows us to participate in a potential move toward the channel’s upper boundary near 1.1880 while strictly limiting our risk. Expirations in late January or February 2026 would give the trade time to play out after the holiday slowdown.<\/p>\n
Conversely, given the overbought RSI and the psychological resistance at 1.1800, we should also consider the risk of a pullback. Buying put options with strikes around 1.1750 would be a direct way to profit from a move back toward the key support at the 50-day EMA near 1.1660. This acts as a good hedge or a speculative bet on short-term weakness.<\/p>\n
We must remember that trading volumes are typically thin between Christmas and New Year’s, which can lead to exaggerated moves on little news. Looking back at the post-holiday periods in previous years, such as in early 2024, we often saw a surge in volatility as institutional traders returned. A period of consolidation now could be setting the stage for a much larger, decisive move in January.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD trades near 1.1790; bullish signals persist, though momentum indicators hint at near-term consolidation risk.<\/p>\n","protected":false},"author":62,"featured_media":16965,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-43530","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\/43530","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=43530"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43530\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16965"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=43530"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=43530"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=43530"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}