The EUR/USD pair is currently positioned within a typical compression zone: the spot is trading in the range of 1.1770–1.1775, with buyers actively supporting that level, while a substantial resistance band between 1.1800 and 1.1875 persists in preventing any lasting breakout. The weekly snapshot reveals a distinct trend: each decline toward 1.1770 has drawn interest, while every advance into the 1.1800–1.1875 range has encountered resistance. Following that, the subsequent technical focal point is the 1.1919 projection, succeeded by the psychological level at 1.2000. The pair is currently confined within a range of approximately 250–300 pips, with support at 1.1770 and resistance at 1.2000. The current price, around 1.1773, is situated at the lower boundary of this bullish framework, rather than at the upper end. For a significant adjustment in EUR/USD, the market must close firmly above the 1.1875–1.1919 range; while the spot stays below this level, we are witnessing a pause in an uptrend, rather than a finalized bullish movement. The recent EUR/USD pattern exhibits a clear trend: the pair has established a series of higher lows following the last significant downturn, with the 1.1770 reaction low serving as the market’s definitive “line in the sand.” The breakaway gap that developed during the ascent established a structural shelf, with price consistently retracing to that area and maintaining its position. That is precisely why the recent decline to 1.1770 was referred to as a “gift” for buyers – the market examined the gap area, eliminated weaker participants, and subsequently reversed direction.
The micro-resistance at 1.1780 represents the initial challenge; if EUR/USD can successfully navigate offers at this level, it paves the way towards 1.1919 and subsequently to the wider resistance zone at 1.2000. The formation of higher lows beneath a stable or gently ascending resistance level exemplifies a typical bullish continuation: purchasers are prepared to invest more with each retracement, while vendors are compelled to protect the same zone consistently. The prevailing pressure typically aligns with the underlying trend, provided that the critical support level – in this case, 1.1770 – remains intact on a daily closing basis. The macro backdrop elucidates the reason behind the upward drift of EUR/USD instead of a downward break. Gold is currently positioned around $4,531–$4,550 per ounce, having reached record levels exceeding $4,549. Meanwhile, silver has surged into the $76–$79 range, showcasing year-to-date increases of approximately 160–220%, contingent on the benchmark used. Currently, copper has reached approximately $5.90 per pound on COMEX and exceeds $12,000 per tonne on the LME, reflecting an increase of 30–40% this year. The current scenario, with XAU/USD approaching $4,550, silver nearing $79, and copper reaching record levels, indicates a weak-dollar environment. This indicates a trend towards reflation and liquidity, with the market already adjusting for anticipated Federal Reserve rate cuts in 2026, while also requiring safeguards against fiscal and geopolitical uncertainties.
When the market anticipates at least two Fed cuts for 2026 and observes the dollar weakening on days when metals surge, the USD leg experiences a structural softening, despite occasional short bursts of strength emerging around data releases. In the case of EUR/USD, a weaker USD combined with a resilient Eurozone indicates that declines towards 1.1770 are being viewed as buying opportunities rather than being met with heavy selling, particularly as Wall Street equity indices remain close to all-time highs and risk appetite remains stable. The EUR/USD narrative aligns with the overall USD trend when examining the G-10 landscape. The USD/CAD cross has declined past 1.3750 and is moving towards the 200-week EMA, with a significant support level around 1.3600. This indicates that the Canadian dollar is experiencing less pressure, even in the context of soft liquidity. USD/CHF has declined to the 0.7900 region, where the Swiss National Bank has indicated its vigilance regarding the franc’s strength; this establishes an effective support level for the dollar at that point. In USD/JPY, the price is fluctuating within a range of ¥155 to ¥158, as neither the bulls nor the bears have managed to achieve a breakout. None of these levels indicate a strong “dominant USD uptrend.” Instead, they characterize a sideways-to-soft dollar with areas of resistance. In that environment, EUR/USD trading at 1.1770–1.1780 with upside projections to 1.1919 and 1.2000 aligns with the current trend: the euro does not require extraordinary growth; it simply needs the dollar to remain weak as positioning stabilizes following a year where metals, crypto, and risk assets have taken in a considerable amount of global liquidity.
The calendar is significant. The pair is navigating the narrowest trading range of the year, which accounts for the EUR/USD’s fluctuations within a limited 1.1770–1.1800 band rather than swiftly targeting 1.1875. Order books exhibit low activity, spreads expand throughout the day, and a single large transaction can move the pair by 20–40 pips despite no significant shift in the macroeconomic context. The observation suggests that the euro is expected to “settle into consolidation” should it fail to surpass the 1.1800–1.1875 range during this phase of reduced market activity. Consolidation is taking place in the upper half of the medium-term range, rather than at the lower levels. Provided that daily closes remain above 1.1770, the range between 1.1770 and approximately 1.1875 should be viewed as energy accumulation beneath resistance instead of a potential reversal pattern. A clean daily close below 1.1770 would negate that scenario and pave the way back toward 1.1700–1.1650, but the current market conditions do not indicate that at this time. From a trading perspective, EUR/USD presents a distinctly defined level map. On the downside, the main support range is 1.1770–1.1750; below that, there is a secondary level of defense around 1.1700, followed by deeper levels toward 1.1650. On the topside, the initial trigger zone is 1.1780–1.1800; above that, price encounters the broader resistance area at 1.1875, followed by the measured objective near 1.1919, and ultimately the round target at 1.2000. The risk/reward profile suggests that it is more advantageous to purchase during dips around 1.1770, placing stops beneath 1.1700, instead of pursuing strength as it approaches 1.1875 or higher. Starting from 1.1770 with a stop set at 1.1690 (approximately 80 pips of risk), the potential upside to 1.1919 is around 150 pips, while reaching 1.2000 presents about 230 pips. This results in a reward-to-risk ratio of approximately 2:1 to 3:1, assuming the bullish structure progresses positively.
If EUR/USD instead falls below 1.1700 and maintains that position, the trade idea is rendered invalid, and the pair reverts to a neutral or slightly bearish stance, with market attention turning to the mid-1.16 area instead. The market’s sentiment is centered on two distinct figures: 1.1800 and 1.1919. The 1.1800 area has been tested on several occasions and currently serves as tactical resistance. The genuine strategic indicator is positioned at 1.1919. A movement towards and a response from that level will indicate if this action is merely a year-end squeeze or the initial phase of a more sustained EUR/USD uptrend that could eventually reach 1.2000 and further. A failure pattern at 1.1919 – for instance, a spike into the level followed by a strong rejection back under 1.1875 – would indicate potential bull exhaustion and could likely pull the pair back toward 1.1770 and possibly 1.1700. A sustained break and daily close above 1.1919 would compel shorts to cover and could trigger a movement towards 1.2000, particularly if this happens in conjunction with additional dollar weakness fueled by strength in metals and renewed anticipations of Fed easing. That’s why the market is closely monitoring these levels: 1.1770 establishes the floor of the current structure, while 1.1919 determines if this trend has genuine momentum. In summary – with the current level around 1.1773, consistent defense of the 1.1770 support, a distinct overhead structure between 1.1875 and 1.1919, and a weaker USD indicated by gold approaching $4,550, silver near $79, and copper around $5.90, alongside cross-FX movements that do not support broad dollar strength – the outlook for EUR/USD heading into early 2026 appears positive, rather than negative.
The current market conditions do not support a strong short position as long as 1.1770 remains intact; a more accurate assessment leans towards a moderately bullish outlook with clearly defined risk parameters. That indicates: EUR/USD presents a buying opportunity on dips towards 1.1770, with a target range set between 1.1919 and 1.2000, and a critical support level established below 1.1700. The pair is not experiencing a blow-off rally; rather, it is undergoing a steady ascent within a clearly established range. If the market falters at 1.1919 and retreats below 1.1770, the assessment changes to Hold/neutral, prompting a decision to remain on the sidelines. Until that breakdown occurs, the framework, the broader economic environment, and the multi-asset landscape all suggest that the euro holds an edge over the dollar as we transition from late 2025 into the early weeks of 2026.