EURUSD poised to test yearly peak on dollar softness

The EURUSD pair has been steadily climbing, pushing up to 1.18074—a peak not seen since September 2025. Both technicals and fundamentals are lining up in support, laying the groundwork for more euro strength in the weeks ahead. 

For the time being, charts tell a convincing story. Bollinger Bands are flaring out, pointing to rising volatility and suggesting that buyers are in the driver's seat. Price dynamics pressing against the upper band near 1.18044 confirm the uptrend's staying power. Adding to the case, the Stochastic Indicator has recently completed a bullish crossover after dipping toward oversold territory. Rounding out the picture, the Chaikin Oscillator's positive trend reflects huge buying volumes and positioning for a powerful euro.

Beneath the surface, the dollar is losing its luster as markets continue to factor in Federal Reserve (Fed) monetary easing through 2026—a bet that has held steady even after a solid US GDP print. Meanwhile, the single currency is benefiting from a less wobbly eurozone backdrop and the European Central Bank (ECB) that is striking a more patient tone. By holding rates and revising its forecasts higher, the regulator has effectively shut the door on near-term stimulus, thus creating a clear policy gap that favors the euro.

Heading into the holidays, thinner liquidity could amplify price swings. As EURUSD nears key resistance at 1.18650 and 1.19180—previous local highs—profit-taking and a technical pullback become more likely. Until then, the pair may take a breather before challenging those peaks.

Pay attention to the trading plan down below:

Sell EURUSD from 1.18650. Take profit: 1.1740. Stop loss: 1.19180.

This forecast holds true from December 24 till December 31, 2025.