EURUSD reaches pre-war highs, supported by rising market optimism

The euro rallied to a fresh two-month high on Friday, as bulls regained momentum after an eight-day advance paused in the previous two sessions with narrow consolidation.

Continued weakness in the dollar helped sustain risk appetite and offered fresh support to the single currency, which has now recovered all losses triggered by the Middle East conflict over the past nearly two months.

The latest advance broke above key Fibonacci resistance at 1.1826, representing the 61.8% retracement of the 1.2082/1.1410 decline, with traders now looking for a weekly close above this level to confirm a stronger bullish signal.

The pair remains on course for a third consecutive weekly gain, supported by a sharp acceleration higher over the last two weeks.

Daily technical indicators remain firmly constructive, with sentiment further boosted by the breakout above the thickening daily Ichimoku cloud, reinforcing the positive near-term outlook.

However, the stochastic oscillator is deeply overbought, while the RSI continues to rise toward overbought territory, suggesting that upside momentum may begin to face increasing resistance.

Under current conditions, a period of consolidation or a limited pullback — ideally holding above the 1.1750 area — could provide more attractive levels for renewed bullish positioning, targeting an extension toward 1.1900 and beyond.

Traders should also monitor geopolitical developments over the weekend, as any fresh headlines may influence Monday’s market opening.

Res: 1.1875; 1.1900; 1.1924; 1.2000
Sup: 1.1826; 1.1770; 1.1746; 1.1700