EUR/USD Consolidates Near 1.1755 as 1.1800 Emerges as Key Resistance—Here's What Traders Should Watch

The Setup

EUR/USD is currently sitting at 1.1755 during Friday’s European morning session, maintaining a solid footing above the 100-day EMA at 1.1635. What makes this interesting for active traders? The pair is holding in positive territory while RSI reads 59.8, showing momentum without tipping into overbought extremes—a classic setup that usually rewards dip buyers.

Why the Euro Has Legs

The ECB’s December meeting outcome didn’t surprise, but it did matter. By keeping rates steady and signaling no rush for additional cuts, the central bank inadvertently firmed the Euro’s hand. ECB President Christine Lagarde stressed the bank won’t lock into a predetermined rate path, instead adopting a data-dependent, “meeting-by-meeting” stance. Market consensus points toward rates staying anchored through 2026, which removes downside surprises for EUR.

On the flip side, the USD faces headwinds from Fed leadership noise. Reports suggest President Trump will nominate a dovish replacement for Jerome Powell (whose term concludes in May) and expects the next Fed chief to maintain accommodative rates. Such commentary raises red flags about monetary policy independence, likely weighing on the Greenback and providing tailwind for EUR/USD.

Technical Levels That Matter

The daily chart tells a compelling story. Price trades above the Bollinger middle band at 1.1738, but Bollinger bands are compressing—a sign volatility is subdued after the recent bounce. The upper band sits at 1.1820, marking the first real barrier traders need to crack. A convincing daily close above 1.1820 could accelerate gains, while support anchors at 1.1655 (the lower Bollinger band).

The 100-day EMA’s upward slope is crucial. As long as EUR/USD doesn’t crack below 1.1635, the medium-term bias remains bullish. The current setup resembles that of stable currency pairs during transition periods—not unlike observing how 70 AUD to USD movements track during similar central bank cycles—where breakout attempts often precede sustained rallies.

Trading the Range

With RSI momentum improving but volatility contracting, this looks like a consolidation before the next leg. Dips toward the EMA offer decent risk-reward for bulls targeting the 1.1820 level. A close above resistance could hint at extension toward higher resistance zones.

The fundamentals (ECB steady, USD under pressure) and technicals (bullish structure, compressing bands) align—suggesting patience with bullish positioning until either 1.1820 breaks convincingly or support at 1.1655 fails.