EUR/USD Price Forecast: Eur 1.18 Support Holds as Dollar Rally Fades Below 97.5

EUR/USD Price: 1.1800 Support Tries To Hold While Dollar Momentum Fades

EUR/USD Holds 1.1800 As Bears Fail To Force A Clean Breakdown

EUR/USD has stalled exactly where it needed to. After sliding from the 1.2050 peak, the pair met heavy buying around the 1.1800 handle, which is now acting as a pivot rather than just another intraday level. Monday’s push lower tested the downside and briefly threatened the 1.1737–1.1700 zone, but sellers could not force a decisive break. Spot is now trading roughly in the 1.1810–1.1815 band, treating 1.1800 as a floor. The rebound is backed by positioning, not luck. The drop into 1.1800 came with deeply stretched intraday momentum indicators and a crowded short euro trade. Once the market printed the downside objective near that level, candles began to show long lower wicks, signaling that real money and fast money accounts were absorbing offers around 1.1780–1.1800 rather than pressing for another leg lower. As long as EUR/USD continues to reject sub-1.1800, bears are on the defensive even if they still control the bigger picture from the 1.2050 top.

EUR/USD Versus DXY: Euro Stabilizes While US Dollar Index Slips Back Toward 97.4

The EUR/USD recovery is occurring against a US Dollar that has lost part of its earlier momentum. The US Dollar Index (DXY) has retreated toward the 97.4–97.5 band after failing to extend the spike to 99.8, despite a strong run of US data. The ISM Manufacturing PMI jumped to 52.6 in January from 47.9 in December, beating the 48.5 consensus, and the 10-year US yield climbed almost 1% in the previous session. Normally that mix keeps the USD well bid. This time, policy and politics are capping the move. The nomination of Kevin Warsh as the next Fed chair is being read as a shift toward a more cautious, data-driven Federal Reserve rather than a blindly hawkish one. In parallel, Fed commentary framing the 3.50%–3.75% policy band as roughly neutral limits the probability of an aggressive new tightening leg. That combination is taking the top off the USD and giving EUR/USD the space to hold above 1.1800 despite the better US macro prints.

EUR/USD And Risk Sentiment: Macro Headlines Push Flows Out Of The Dollar

Short-term flows also favor EUR/USD stabilization because the demand for the USD as a safe haven is cooling. A US Senate deal to move forward with a government funding package reduces shutdown risk and removes a near-term political tail risk that had supported the dollar. In addition, a US–India trade deal that trims tariffs on both sides and includes India stepping away from Russian oil is read as a modest positive for global trade and risk assets. Those developments encourage allocations back into equities and higher-beta plays, at the expense of defensive dollar positioning. For EUR/USD, this means dips into 1.1780–1.1800 are now meeting real buying interest from investors reallocating away from the USD, even though the structural growth and rate advantage still sits on the US side.

EUR/USD Technical Map: Trendline Support, EMAs, And The 1.20 Ceiling

On the technical side, EUR/USD is sitting directly on a key decision zone. On the 2-hour chart, price remains above a rising trendline that has guided the entire recovery from prior lows, and trades above the 200-EMA near 1.1780, which is the first serious medium-term dynamic support. While spot holds over that 1.1780 area, short-term structure stays constructive. On the daily chart, the pair is still above its 50-day EMA around 1.1737, keeping the move from 1.1578 alive as a broader up-swing rather than a completed pattern. At the same time, EUR/USD trades just under the 9-day EMA at 1.1836, the first resistance that bulls must clear to upgrade this from a bounce to a genuine recovery leg. Momentum has shifted from negative to neutral. The 14-day RSI has climbed back toward 53 after dipping below the midline earlier, signaling that downside momentum is fading while the market is far from overbought. The structure is typical for a corrective pullback: EUR/USD has been sold from 1.2050 into 1.1800, and is now attempting to rebuild energy to probe higher bands like 1.1895–1.2000, while still vulnerable if support fails. Above, resistance stacks up at 1.1836 (9-day EMA), then in the 1.1895–1.1900 area, and later at 1.2000, followed by 1.2082 and potentially the upper channel limit near 1.2290 if momentum truly turns. Below, a break of 1.1780 would expose the 1.1737 50-day EMA, then 1.1700, with 1.1578 as the deeper downside magnet if the bearish bias fully reasserts.

Short-Term EUR/USD Levels: 1.1836–1.1900 As Sell Zone, 1.1737–1.1700 As Key Support

In the very near term, EUR/USD is boxed into a tight but critical corridor. Around 1.1810–1.1815, the pair is pinned between that 1.1780–1.1800 support band and the 9-day EMA at 1.1836 above. Recent candles show small bodies with pronounced lower shadows around support, a clear indication that selling pressure is being absorbed and that buyers are quietly building positions on weakness. If spot can close decisively above 1.1836, a run toward the 1.1895–1.1900 region becomes the base case, with the next upside test at 1.1950–1.2000. A sustained break of 1.2000 would then bring the 1.2050–1.2082 zone back into play and re-open the channel toward 1.2290. If instead EUR/USD slips back under 1.1780, markets will immediately refocus on the 1.1737 50-day EMA. A daily close below that level would confirm that the rebound off 1.1800 was just a corrective pause within a broader down-swing from 1.2050, upgrading the probability of a move toward 1.1700, and then the 1.1578 low if the dollar strengthens again.

EUR/USD And Fed Expectations: Why Bulls Struggle Above 1.1950–1.2000

Even with the current bounce, EUR/USD faces a structural headwind from policy differentials. The US backdrop still combines a PMI at 52.6, firmer Treasury yields, and a Federal Reserve that is signaling neutrality rather than a quick pivot into an easing cycle. The EUR side does not yet offer a clear counterweight in the form of superior growth, higher yields, or an aggressive tightening path. That gap keeps the 1.1950–1.2000 area a natural profit-taking zone on rallies. The DXY profile reinforces this ceiling. The index has retreated to 97.4–97.5, but the prior spike toward 99.8 shows how quickly the USD can reprice if the market leans back toward more hikes or pushes out rate-cut expectations. A fresh leg higher in DXY from the 97.2–96.8 support region would likely cap EUR/USD near the 1.1895–1.2000 band and drive traders back toward the 1.1737–1.1700 support pocket.

EUR/USD Strategy View: Sell The Rallies, Bearish Bias While Below 1.1950

Combining macro and technical signals, the stance on EUR/USD remains bearish, with a preference to sell strength rather than chase upside. The pair is defending 1.1800, but it is doing so inside a corrective wave that started at 1.2050, against a still-supportive USD yield and data backdrop. As long as EUR/USD remains beneath the 1.1895–1.1950 resistance band, rallies into that zone are better used for building short exposure than for breakout trades. A logical tactical setup is to fade strength between 1.1880 and 1.1950, with risk defined above the 1.2050 swing high, and downside targets at 1.1780, 1.1737, and 1.1700, with a possible extension toward 1.1578 if the dollar re-accelerates. Only a sustained break and hold above 1.1950–1.2000 would flip the bias and validate a renewed EUR/USD uptrend toward 1.2082–1.2290. Until the market prints that shift, the pair is best treated as a sell-on-rally market in a still-fragile corrective environment.

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