The EUR/USD pair is trading positively around 1.1755 during early European hours on Friday. The Euro (EUR) has found support following the European Central Bank’s (ECB) December policy meeting, where rates were kept unchanged and the outlook suggested reduced urgency for future cuts.
ECB President Christine Lagarde emphasized a data-dependent, “meeting-by-meeting” stance, stating the central bank is not pre-committing to a specific future rate path. Consequently, some economists anticipate ECB rates could remain steady through 2026.
Conversely, the US Dollar (USD) faces potential headwinds from expectations that US President Donald Trump will appoint a dovish successor to Fed Chair Jerome Powell, whose term concludes in May. Trump has expressed a preference for a Fed Chair who keeps interest rates low and will not “disagree” with him. These comments are likely to intensify concerns among investors and policymakers regarding Federal Reserve independence.
On the daily chart, EUR/USD is trading at 1.1755, maintaining its medium-term bullish bias by holding above the ascending 100-day EMA, currently positioned at 1.1635. The RSI has advanced to 59.8, confirming strengthening momentum while remaining below overbought levels; sustaining price action above the EMA is essential to keep the upside trajectory intact. Furthermore, the price is situated above the Bollinger middle band (1.1738). The narrowing of the bands suggests reduced volatility following the recent recovery phase. The upper band at 1.1820 currently caps upside potential; a daily close above this level could extend gains, whereas a retreat below the middle band would expose the lower band near 1.1655. Overall, trend and momentum indicators favor a “buy on dips” strategy until volatility expands.
