EUR\/USD stabilises around 1.1850 after a drop of over 1% on Friday. Despite positive Eurozone and German manufacturing PMI revisions, the Euro remains challenged by a stronger US Dollar. This Dollar support is due to Kevin Warsh’s nomination as the upcoming Federal Reserve Chair.<\/p>\n
US President Donald Trump’s announcement of Warsh, supportive of a smaller Fed balance sheet, brought some market relief. In Europe, manufacturing activity exceeded expectations in January, with Eurozone PMI revised to 49.5 and German PMI to 49.1. The attention is now on upcoming US manufacturing data.<\/p>\n
The market anticipates economic developments, like the Eurozone Central Bank’s monetary policy decision and the US Nonfarm Payrolls report. Kevin Warsh’s nomination influenced positive market reactions, although he has been wary of inflation risks.<\/p>\n
German retail sales showed a 0.1% rise in December, contradicting the projected fall, while US January ISM Manufacturing PMI is expected to increase to 48.3. EUR\/USD is trading just above 1.1835 with indicators suggesting a bearish trend. Market participants remain attentive to shifts in US manufacturing data, including the ISM Manufacturing PMI and Prices Paid metrics, for assessing future economic conditions.<\/p>\n
The EUR\/USD is holding near 1.1850, and the key driver is the market’s positive reaction to Kevin Warsh’s nomination as the next Fed Chair. This suggests a more hawkish policy ahead, which is strengthening the US Dollar against the Euro. We should watch for this dollar strength to be the dominant theme in the coming weeks.<\/p>\n
Later today, the US ISM Manufacturing PMI will be released, with markets expecting a modest improvement to 48.5. We should remember that this indicator has been in contractionary territory below 50 for more than a year, reflecting the manufacturing slowdown we saw throughout 2025. A number that beats expectations would likely add significant fuel to the dollar’s rally.<\/p>\n
The European Central Bank’s meeting on Thursday is the next major event for the Euro. Given that we’ve seen Eurozone inflation cool considerably from its peak in late 2024, the ECB may signal a more cautious or dovish stance. This policy divergence, with a potentially hawkish Fed and a dovish ECB, creates a strong fundamental case for a lower EUR\/USD.<\/p>\n
For derivative traders, this week’s packed calendar suggests a sharp increase in implied volatility. Options strategies could be effective, with puts on EUR\/USD looking attractive to position for a break below the 1.1830 support level. If direction is uncertain but a large move is expected after the NFP report, a long straddle could also be considered.<\/p>\n
This Friday’s US Nonfarm Payrolls report will be critical in confirming the Fed’s path. We saw the US labor market show surprising resilience for most of 2025, consistently beating consensus forecasts and keeping wage growth firm. Another strong jobs report would validate the Warsh nomination and likely send the EUR\/USD sharply lower.<\/p>\n
The technical picture supports a bearish outlook as the pair struggles below the 1.1900 level. If upcoming US data comes in strong, we should anticipate a decisive break of the key support area around 1.1830. A failure to hold this level would open the door for a move down toward the next major target at 1.1770.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD holds near 1.1850 amid strong US Dollar, Warsh’s Fed nomination, and key manufacturing data.<\/p>\n","protected":false},"author":62,"featured_media":16961,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40695","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=40695"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40695\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=40695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=40695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=40695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}