EUR/USD has been pressing higher into mid-December, with the euro hovering in the mid-1.17s as traders position for a pivotal week of central bank decisions and delayed US data that could reshape rate expectations into 2026.
The timing matters. It’s Monday, December 15, 2025, and markets are balancing two big forces:
- A euro that has shown “hidden strength” on a trade-weighted basis through 2025, even as the ECB signals it’s in a “good place.”
- A US dollar that has started the week soft ahead of a busy run of central bank meetings and macro releases (including delayed US payroll data).
This post breaks down what’s driving EUR/USD, what to watch from the ECB on Thursday (December 18), and how traders can think about the next move without guessing.
What’s pushing EUR/USD toward yearly highs?
1) The dollar is soft—and the market is sensitive to “rate path” narratives
The clearest near-term tailwind for EUR/USD is simple: the dollar hasn’t been able to sustain rebounds. Reuters notes the greenback edging lower at the start of a week packed with central bank decisions and delayed US data releases—exactly the kind of environment where positioning can swing quickly.
Gold markets are also reflecting the same “softer dollar / lower yields” theme, with investors watching whether incoming US labour data reinforces the idea of more easing next year.
When USD is on the back foot, EUR/USD doesn’t need “amazing” euro news to grind higher—it just needs the ECB not to surprise dovishly.
2) The euro’s bigger 2025 story: strength that the ECB can’t ignore forever
A Reuters deep dive this month argued that the euro’s strength (especially in real effective terms) could complicate the ECB’s comfort zone—because a stronger currency can tighten financial conditions and weigh on export competitiveness.
In other words: EUR can rise on policy stability, but if it rises too far, it can become a policy input again.
That’s why the euro’s approach toward yearly highs ahead of this week’s meeting is so interesting. It puts the ECB in a delicate spot: stay neutral, but avoid encouraging a one-way EUR rally.
3) Eurozone growth resilience has improved the “hold” case
ECB communications in late November described a macro backdrop that markets interpreted as more resilient than feared, with risk sentiment supported by euro area and US resilience. European Central Bank
That matters because it supports the market’s baseline: ECB hold, not aggressive easing—one more reason EUR demand can stay supported in the short term.
The ECB decision: what the market expects on December 18
According to a Reuters poll, economists overwhelmingly expected the ECB to hold rates at the upcoming meeting, with the deposit rate at 2%, and for rates to remain steady well into 2026 under a stable outlook. Reuters
So if the decision is widely anticipated, what actually moves EUR/USD?
The 3 ECB “moving parts” traders care about most
1) The tone on inflation vs growth
If inflation is described as well-anchored and growth resilient, the market reads “hold” as confident (EUR supportive).
2) Any discomfort with euro strength
Reuters reporting highlighted that a strong euro can muddy the ECB’s “good place” narrative. If officials lean into FX as a headwind, the market may take that as subtle pushback against further EUR gains. Reuters
3) Forecast upgrades / narrative shift
Some bank commentary this week suggested that upgrades to the outlook and supportive spreads have been a fundamental driver behind the euro’s bid.
The US side: delayed data + “busy-week” volatility risk
This week isn’t just about the ECB. Reuters flagged that investors are also waiting on delayed US data (including jobs data), and that the week’s central bank cluster can amplify FX swings even when nobody shocks the market outright.
ING’s daily FX note echoed the same setup: the dollar starting the week soft ahead of a very busy schedule, with US payrolls highlighted as a key release.
Put simply: EUR/USD can jump or dip even if the ECB is perfectly “as expected,” because USD legs can appear quickly when US data surprises or risk sentiment flips.
Technical picture: key levels traders are watching
EUR/USD has been trading around 1.17+, and multiple market updates highlighted price action holding above 1.1700 into the week, with attention on whether the pair can sustain a break toward the next resistance zone.
A practical way to frame the chart right now:
- Support zone: ~1.1700 (psychological + commonly referenced near-term base) FXStreet
- Near resistance: mid-1.17s into ~1.1760–1.1800 area (where recent highs have clustered in market commentary)
3 scenarios for EUR/USD this week
Scenario A: ECB holds and stays neutral → EUR/USD grinds higher
This is the “default bullish” path: the ECB holds, the tone is calm, and there’s no strong signal that euro strength is becoming a concern. With USD still fragile, EUR/USD can push to fresh highs for the year.
Scenario B: ECB holds but sounds uncomfortable with EUR strength → pullback risk
If the ECB leans into currency strength as a tightening force or highlights downside risks tied to competitiveness, EUR/USD could fade even without a rate change.
Scenario C: Whipsaw week → spike, reverse, then range
This is common into year-end liquidity: the pair spikes on the headline, reverses on the press conference nuances, then becomes choppy as the market rebalances around delayed US data and other central bank outcomes.
Trading notes: how to handle ECB week (especially if you run EAs)
ECB days are not “normal market days.” Even if your directional view is right, execution risk can be the difference between a good trade and a frustrating one.
If you trade manually:
- Expect spread widening around the decision and press conference
- Avoid placing tight stops right before the release unless your strategy is built for news volatility
- Consider a “post-news” approach: wait for the first spike, then trade the second move once liquidity normalises
If you run an EA:
- Use max spread filters and news filters if available
- Reduce risk preset or pause new entries around the ECB window
- Watch for slippage sensitivity (especially on market orders)
These aren’t “fear” tactics—just realistic execution management in a high-impact window.
Bottom line
EUR/USD is pushing toward yearly highs because the USD has started the week soft, and the ECB is widely expected to hold—a combination that often supports the euro in the short term.
But the ECB meeting on Thursday, December 18 is still a major catalyst because tone matters: the bank needs to balance confidence in the outlook with the reality that an increasingly strong euro can tighten conditions and potentially complicate policy
