VT 
With Christmas week underway, global markets are operating in thinner conditions as institutional desks scale back activity. This seasonal lull often exaggerates moves, with smaller trades pushing prices more sharply than usual. For EUR/USD, the temporary lift reflects opportunistic buying rather than a shift in sentiment.
The euro continues to face headwinds from fiscal debates across the Eurozone, where concerns over debt sustainability and budget pressures weigh on confidence. Meanwhile, the U.S. dollar remains supported by year-end demand, with investors reluctant to unwind positions ahead of clarity on the policy path of the Federal Reserve in 2026.
Against this backdrop, rallies in EUR/USD are likely to be sold into, as the euro-dollar pair is showing signs of topping out.
EUR/USD: Technical Levels in Focus
The dominant trend remains bearish, with rallies expected to attract selling interest rather than spark sustained upside momentum. Traders are watching the 1.1740 resistance zone closely, where fresh supply is likely to cap gains and reinforce the broader downtrend.
- Resistance: 1.1740
- Upside invalidation: A break above 1.176 would challenge the bearish setup
- Support: 1.166, followed by 1.164
- Preferred strategy: Sell into rallies near 1.1740, targeting 1.166 and 1.164. Stops should be placed above 1.176 to guard against a breakout.
- Range play: Trade tactically within 1.164–1.176 until a decisive move develops. Bias remains bearish while below 1.1740.
Year-End View
EUR/USD is expected to probe higher toward 1.1740, but this level is seen as a trigger for renewed selling pressure. Unless the pair breaks above 1.176, downside targets at 1.166 and 1.164 remain in play. With holiday liquidity thinning, traders should anticipate sharper swings but remain aligned with the dominant bearish trend.
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