EUR/USD Breaks Above Wedge Barrier: 1.1820 in Sight as Momentum Accelerates

EUR/USD climbs to 1.1755 in Friday’s early European trade, signaling renewed buying interest above a critical wedge barrier formation. The major pair maintains its edge above the 100-day EMA at 1.1635, with RSI pushing into 59.8—a sign of strengthening momentum without yet flashing overbought signals. Price action suggests traders are positioning for a breakout toward the next key resistance level.

What’s Driving the Upside?

ECB’s December policy meeting provided the initial spark. The central bank held rates steady and signaled limited appetite for further cuts, offering underlying support to EUR. President Christine Lagarde reiterated a data-dependent stance, with no pre-commitments on rate paths, though markets are pricing in stability through 2026.

Across the Atlantic, the dollar faces fresh headwinds. Speculation that a dovish Fed Chair successor could replace Jerome Powell (whose mandate expires in May) has weighed on USD demand. Market participants are eyeing whether the incoming administration’s preferences will influence monetary policy direction, creating uncertainty for Greenback strength.

Technical Picture: Wedge Setup and Price Targets

The daily chart reveals EUR/USD trading within a narrowing wedge pattern, currently breaking toward its upper boundary. The pair’s position above the Bollinger middle band (1.1738) keeps the technical advantage in the bulls’ favor. Resistance materializes at the upper Bollinger band and 1.1820—the first meaningful wedge barrier to clear.

Should EUR/USD decisively close above 1.1820, the upside path extends further. A pullback toward 1.1738 (middle band) would test conviction, with the 1.1655 support level offering a floor on deeper dips.

Key Levels to Watch:

• Resistance: 1.1820 (upper wedge barrier)
• Support: 1.1738 (Bollinger middle band), 1.1655 (lower band)

Overall, the combination of hawkish ECB signals, dovish USD expectations, and technical breakout above the wedge formation favors continued upside momentum on dips.