EUR/USD climbed to its highest level in a month on Friday, rallying to 1.05215 as weaker U.S. data and tighter German-U.S. spreads supported the euro. U.S. PMI reports indicated a sharp slowdown in business activity, while the University of Michigan sentiment index was revised lower, reducing expectations of aggressive Fed policy. Meanwhile, President Trump’s less combative comments on tariffs against China boosted risk appetite, lifting China’s yuan and the euro due to Europe’s reliance on Chinese growth. Eurozone PMI also returned to growth territory, beating expectations at 50.2, further boosting the pair.

From a technical standpoint, EUR/USD is poised for further gains. The pair rallied above the 5- and 21-day moving averages and the daily Ichimoku cloud base, signaling renewed bullish momentum. Daily and monthly RSIs are rising, while a massive January bull hammer adds weight to the bullish case. Key resistance lies at the 1.0600/30 zone, with a break above potentially opening the door for a move toward 1.0925. Support is seen at 1.0464 (Friday’s low), with additional levels at 1.0400.

Upcoming events will be critical for confirming the bullish trend. Next week’s Fed and ECB meetings, along with U.S. Q4 GDP and PCE data, will provide directional cues. A dovish Fed or further signs of slowing U.S. growth could tighten spreads further, fueling EUR/USD gains. Alternatively, hawkish Fed guidance or stronger U.S. data could stall the rally and push the pair back toward support. For now, easing trade tensions and positive technical signals leave bulls in control, with eyes on a potential breakout above 1.0600.