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By: Michael Boutros, Sr. Technical Strategist
EUR/USD is approaching one of its most consequential technical zones in more than a decade following the Federal Reserve’s January rate decision. As of late January 2026, sustained U.S. dollar weakness has driven the euro into a cluster of long-term retracement and extension levels that have historically capped advances. The timing is critical, with only days remaining before the monthly close determines whether this move carries structural significance. These insights are drawn directly from a primary-source market analysis focused on multi-timeframe price behavior.
Michael Boutros, Senior Market Analyst at FOREX.com, has spent years analyzing foreign exchange market structure through major policy and volatility cycles. His expertise in multi-timeframe technical analysis gives him a distinct vantage point on how monthly and yearly closing levels shape institutional positioning and longer-term trend validation.
EUR/USD is testing a convergence of long-term resistance that has historically defined major turning points in the pair. Boutros notes that "the big major zone is 1.1917 into 1.2020", highlighting a region shaped by the 100 percent extension of the 2022 advance and the 38.2 percent retracement from the 2008 highs. This clustering of technical signals elevates the importance of confirmation rather than intraday strength. Consequently, a monthly close above this band would materially increase confidence in a sustained bullish continuation.
Beyond resistance, EUR/USD upside potential expands meaningfully only if the breakout is validated on higher timeframes. Boutros explains that "we would need to see a monthly close northbound of 2020 to really fuel the next major leg of the advance", with longer-term objectives extending toward the 2018 and 2021 highs. Without that confirmation, the rally risks stalling into consolidation or correction despite remaining within an uptrend. This distinction underscores why institutional participants often wait for month-end signals before reallocating directional exposure.
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--- Written by Frédéric Guétin, StoneX TV Producer
--- Expert: Michael Boutros, Senior Market Analyst, FOREX.com
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