EUR/USD Approaches a Critical Area: The Battle Between Euro and Dollar Strength

The EUR/USD currency pair has once again become the focus of global markets. In late January 2026, price action moved higher and is now hovering near a key resistance area around 1.18661, a zone that has previously capped price advances several times.

This move did not occur without reason. Behind it lies a contrast in fundamental dynamics between the euro and the US dollar, where the euro is beginning to show resilience, while the dollar is facing pressure from multiple fronts.

This article discusses the strengths and weaknesses of each currency and how these factors are directly reflected in the price structure on the chart.

From a technical perspective, the EUR/USD chart shows a structure of higher lows since the last quarter of 2025. Price experienced a correction, but then strengthened again and is currently testing the supply/resistance zone around 1.18661–1.18918.

This area is crucial because:

It represents a historical resistance that has previously triggered price rejections
It marks the upper boundary of a medium-term range since mid-last year
Price reaction in this zone will determine whether EUR/USD continues its uptrend or returns to a corrective move
With this backdrop, the next direction is highly dependent on the fundamental balance between the euro and the US dollar.

Euro (EUR): Factors Supporting the Euro
One of the main supports for the euro at this time is the broad-based weakness of the US dollar. As global investors begin to reduce exposure to the dollar, the euro automatically becomes a primary alternative among major currencies.