EUR/USD Price Forecast - Eur Holds 1.18 Support as Bulls Aim for 1.19–1.20 on Rising Euro Flows

EUR/USD Price: Bulls Press the 1.18–1.19 Zone as Flows Turn Against the Dollar

EUR/USD built on a 1.1600–1.1700 base and now trades around 1.1830

EUR/USD has transitioned from a defensive grind to a controlled advance. The pair has climbed from demand near 1.1600 and now trades around 1.1830–1.1832, with spot marked at 1.18317 in the latest snapshot. That is roughly a 1.46% gain over the past three months, which is not explosive but very clear directionally: the market is steadily pricing a stronger EUR against the USD, not a spike-driven squeeze. The structure matters more than the percentage. Since late 2025 the pair has been printing higher highs and higher lows, turning what was a soft floor in the 1.1600–1.1700 band into a proper base. Every attempt to push EUR/USD lower has stalled earlier than the previous one, and price has moved from testing that base to leaning on 1.1800 as the new reference level. The move into the 1.18 handle is not a random tick; it is the culmination of a multi-week recovery from lower levels and a clear rejection of the idea that the dollar should dominate across the board. The key is that this advance has held even while broader markets have been hit by trade tensions between the United States and the euro area. Instead of breaking lower on political noise, EUR/USD is using that backdrop to grind higher inside a wide range and test the top of the recent band.

EUR exposure via FXE confirms institutional demand behind the EUR/USD move

The spot move is backed by capital flows. The euro-tracking ETF Invesco CurrencyShares Euro Trust, ticker FXE, absorbed about 5.42 million dollars of fresh capital on 23 January 2026. That single day of buying equals roughly 1.28% of its reported 422.37 million dollars in assets under management. This is not retail noise; it is institutional-sized money deliberately adding euro exposure. When EUR/USD sits at 1.18317 and the ETF that mirrors the common currency sees that size of inflow, the message is straightforward: investors are rebalancing away from pure dollar safety and back toward the EUR. Short-term models confirm the shift. On the one-day horizon, the underlying pair screens as a Buy, which is consistent with what the price action already shows. Short-term momentum traders are not fading 1.18; they are leaning into it. The flows into FXE line up with the macro narrative. Investors are reassessing interest-rate differentials, inflation patterns and relative growth between the eurozone and the United States. Instead of treating the dollar as the only safe currency, portfolios are moving toward a more neutral or even euro-tilted stance. That supports the idea that dips in EUR/USD are being bought by deeper pockets, not just by fast money.

Daily EUR/USD structure: 1.1800 as the line in the sand for the next leg

On the daily chart EUR/USD has stopped behaving like a range prisoner and started trading like a trending pair. The climb from roughly 1.1600 to the 1.1830 area has come with only shallow pullbacks, and every minor dip has been absorbed above former resistance levels. What used to cap the market has turned into a floor. The 1.1800 region is now the key line in the sand. Price is sitting just above it, and recent candles show that sellers cannot sustain pressure below this band. Short-term selloffs have stalled quickly, and there is no sign of the heavy distribution that typically precedes a trend reversal. From a structural point of view, 1.1800 is the first support that matters. If EUR/USD holds above that handle, the path of least resistance remains higher, with buyers controlling the tape and sellers reduced to profit-taking. A clean break and daily close below 1.1800 would not kill the broader uptrend by itself, but it would open the door for a retest of the 1.1700–1.1720 region, where the pair previously found a platform on the way up. For now, the market is not interested in testing that scenario. Pullbacks keep failing well before they threaten 1.18, which reinforces the idea that dip-buyers are active and the dollar side is losing momentum.

EUR/USD 1.18–1.20 band: intraday 1.1800–1.1850 friction and weekly targets at 1.1917–1.1940

Price is not moving in a vacuum around 1.18. There is a clear resistance cluster just above, and EUR/USD is starting to probe that area. The market is currently pressing against the 1.18 handle, with overhead friction extending roughly 50 pips higher, toward the 1.1850 zone. That entire 1.1800–1.1850 corridor has acted as a cap before, and traders remember that. Breaking through it decisively would signal that the pair is no longer just bouncing inside a range but trying to build a new leg toward the 1.19s. The higher-timeframe picture reinforces that view. On the weekly chart the pair has printed a strong bullish candle that closes near its highs, and the structure points toward 1.1917 as a logical next objective. A separate projection on the daily chart identifies 1.1940 as the next major supply zone. Together, these numbers frame the 1.1917–1.1940 band as the first serious upside target for this phase of the move. A sustained hold above 1.1850 would put that region within realistic reach. If EUR/USD can punch into 1.1917–1.1940 and consolidate there instead of snapping straight back, the market will start to talk about a test of the psychological 1.2000 level, which has historical significance and would mark a clear shift in the longer-term balance of power between EUR and USD.

Macro backdrop: trade tensions, rate spreads and the fading dominance of the USD

The advance in EUR/USD is happening against an uneasy political and macro backdrop. Tensions between the United States and the European Union over tariffs and trade policy have been a recurring theme, and they have not disappeared. Yet instead of delivering a one-way bid for the USD, those tensions are now feeding a more complex reaction. Equity markets have pulled back and then stabilized, and currency traders are using the backdrop to reprice relative prospects rather than simply hiding in the dollar. Rate expectations are part of the story. Investors are reassessing where the Federal Reserve and the European Central Bank stand on the next steps. When markets conclude that the Fed is closer to easing than previously thought, while the eurozone is stabilizing, the rate differential that supported the USD for years narrows. That shift helps EUR/USD push higher. Inflation dynamics also matter. Persistent price pressures, fiscal uncertainty and questions over US debt sustainability have weakened the narrative that the USD is the only reliable store of value in developed markets. Against that backdrop, the euro is no longer treated as a structurally weak alternative; it is starting to look like a reasonable counterweight, especially when political risk in the United States is priced as rising. The fact that EUR/USD is climbing while global headlines remain noisy tells you that the market is already positioning for a softer dollar regime rather than waiting for perfect clarity.

Momentum, positioning and the risk if EUR/USD slips back toward 1.1700

Short-term models are aligned with the price action. The one-day technical signal on EUR/USD is firmly in Buy territory, which reflects what traders can see directly on the chart: upward momentum, supportive dips and a lack of aggressive selling. Options markets and ETF flows point in the same direction, with increased interest in euro exposure and reduced enthusiasm for adding new dollar longs at current levels. That does not mean the move is risk-free. The immediate risk for euro bulls is a failed breakout scenario. If EUR/USD repeatedly hits the 1.1830–1.1850 zone and cannot make progress, intraday traders will start locking in gains, and algorithmic systems that track momentum will begin cutting long exposure. A daily close back below 1.1800 would be the first warning sign that this is happening. From there, the next level to pay attention to sits around 1.1700–1.1720, where price previously found demand on the way up and where buyers would be expected to defend again. A clean break below that region would mark a deeper shift, signalling that the current bullish sequence of higher lows has failed and that the market is willing to re-test the original 1.1600 demand area. As long as the pair holds above 1.1700, however, any pullback would still look like a correction inside an ongoing uptrend rather than the start of a new bearish leg.

EUR/USD trading stance: bullish bias and a Buy-on-dips verdict

Putting the price structure, flows and macro context together, the balance of evidence points to a constructive view on EUR/USD at current levels. The pair is trading around 1.1830 with a clearly defined base built between roughly 1.1600 and 1.1700, support now clustered at 1.1800, and upside reference levels at 1.1917 and 1.1940, with 1.2000 looming beyond that. Capital is moving into euro vehicles such as FXE, with a 5.42 million dollar inflow in a single day equal to about 1.28% of that ETF’s 422.37 million dollar asset base, and the short-term technical stance is firmly in Buy territory. Against that backdrop, my stance on EUR/USD is bullish. At current prices the pair is better classified as a Buy on dips than a Sell or a flat Hold. For directional traders, the attractive zone is between roughly 1.1800 and 1.1760, with invalidation if the pair makes a sustained break below 1.1700 and starts closing under that area. On the upside, the first objective sits around 1.1917–1.1940, with a potential extension toward 1.2000 if momentum and macro conditions stay aligned. This is market commentary, not personalized advice, but based strictly on the numbers on the screen and the structure that has formed since 1.1600, EUR/USD currently trades like a market where buying weakness still makes more sense than fading strength.

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