Euro Roars Back: EUR/USD Technical Rally Gains Steam Toward 1.1900 Barrier
Published Date: 26th Jan, 2026
January 26, 2026
The EUR/USD currency pair delivered a powerful technical rally today, surging well above 1.1850 and testing fresh multi-month peaks near 1.1895 as broad-based US dollar selling intensified and risk appetite returned to forex markets.
Breakout Confirmed: Key Levels Fall to Bulls
After consolidating below 1.1805 for several sessions, the euro broke decisively higher in early European trading. The pair quickly cleared the 1.1850 zone, then pushed toward 1.1880 before briefly touching 1.1897, its strongest level since mid-last year.
Technical charts showed clean bullish momentum across timeframes, with the rally backed by rising moving averages and increasing volume on the upside. The decisive breach of prior resistance triggered a wave of short covering and new long entries, reinforcing the short-term uptrend.
Dollar Retreat Accelerates: Geopolitical and Policy Drivers
Persistent dollar weakness remained the dominant force, amplified by signs of reduced immediate trade friction between the United States and Europe. The apparent dialing back of tariff rhetoric helped ease safe-haven flows into the greenback, allowing the euro to benefit from improved risk sentiment.
Market participants described the move as partly driven by fear of missing out, with traders piling into euro longs as the pair displayed textbook bullish continuation patterns. While US policy unpredictability lingers in the background, today's environment clearly favored the single currency.
Pullbacks Contained: Mixed Eurozone Data Fails to Derail Advance
Brief dips occurred after disappointing German business climate figures from the IFO survey, which weighed on sentiment and prompted some profit taking. The pair retreated toward 1.1850 at points but quickly found buyers, preserving the overall bullish structure.
Analysts noted that eurozone data has been uneven lately, yet the technical picture and dollar dynamics have taken precedence over fundamentals in the near term.
Looking Ahead: 1.1900 in Sight, But Caution Remains
Short-term forecasts point to potential extension toward the round 1.1900 level if momentum holds through the London and New York sessions. A sustained close above that mark could open the door to further gains, with some houses eyeing 1.2000 as a longer-term target in an optimistic scenario.
However, traders remain watchful for reversal signals, particularly if upcoming US economic releases surprise to the upside or if renewed geopolitical headlines shift flows back toward the dollar. Support now clusters around the former resistance zone near 1.1800 to 1.1820.
Sentiment Snapshot: Bulls in Control for Now
Current market positioning leans heavily bullish on EUR/USD in the short run, with retail and institutional flows favoring continuation over reversal. The pair's resilience despite mixed data underscores the strength of the technical setup and the depth of dollar selling pressure.
As the trading week progresses, all eyes will be on whether this rally can sustain its pace or if profit taking and fresh catalysts trigger a meaningful correction.
For the moment, the euro's technical breakout has injected fresh energy into currency markets, giving bulls the upper hand heading into the final stretch of January.
Date: 26th Jan, 2026
