The euro is trading around 1.1800 against the US dollar, close to its four-year high of 1.2082 reached last week. Over the past year, the EUR\/USD pair has risen by approximately 14%, affected by narrowing interest rate differentials and the US dollar’s ongoing weakness.<\/p>\n
Market anticipation awaits the European Central Bank’s interest rate decision, with expectations of rates remaining unchanged at 2%, continuing a streak from June 2025. ECB President Christine Lagarde reports that the Eurozone economy remains stable yet faces ongoing risks, especially amid global trade tensions.<\/p>\n
In the US, Treasury Secretary Scott Bessent reaffirmed the commitment to a strong dollar policy during a House testimony. The US Dollar Index is stabilising around 97.50 following recent nominations for the Federal Reserve Chair, hinting at a potential hawkish future direction for the central bank.<\/p>\n
Key US labour market data, including the Nonfarm Payrolls report, has been delayed due to a partial government shutdown. The EUR\/USD pair, maintaining a medium-term uptrend above its 50-day and 200-day moving averages, encounters resistance at 1.1870, with support noted at 1.1740, according to technical indicators such as the 14-day Relative Strength Index.<\/p>\n
We are seeing the EUR\/USD consolidate around 1.1800 after failing to hold above the 1.2000 level last week. With the European Central Bank holding its rate at 2% as expected, one major source of uncertainty has now passed. This leaves us in a tug-of-war between the Euro’s established momentum and a potentially stronger US Dollar.<\/p>\n
Given the US government shutdown and the nomination of a hawkish new Fed Chair, uncertainty is high, which suggests volatility could increase. Traders should consider options strategies like long straddles, which profit from a significant price move in either direction, regardless of which catalyst wins out. A decisive break above 1.1900 or below the 50-day average near 1.1740 could trigger a larger move.<\/p>\n
If we believe the US shutdown will drag on, creating economic doubt, the Dollar could weaken. History shows this can happen; during the 35-day shutdown we saw back in 2018 and 2019, the Dollar Index fell by about 1%. In this scenario, buying EUR\/USD call options with strike prices near 1.1950 or 1.2000 could be a good way to position for a retest of the recent highs.<\/p>\n
On the other hand, the confirmation of Kevin Warsh as Fed Chair could significantly boost the Dollar. His reputation as a hawk suggests he may push for higher interest rates to combat the inflation concerns we saw ravage incomes in 2025. Traders anticipating this outcome could buy put options, perhaps with a strike price around 1.1700, to profit if the pair breaks below its current support levels.<\/p>\n
For a more risk-defined strategy, we can use vertical spreads to lower the initial cost. A bull call spread would cap potential gains but reduce the premium paid for a move toward 1.2000. Similarly, a bear put spread would be a cheaper way to bet on a decline toward the 1.1580 zone.<\/p>\n
With key US labor data delayed, we must place more weight on incoming Eurozone statistics. Any signs of weakness, like Germany’s recent industrial production figures which unexpectedly fell by 0.7% last month, could halt the Euro’s advance. We need to watch these secondary European data points very closely for short-term direction.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Euro nears four-year high as ECB holds rates; US dollar steadies amid Fed speculation and data delay.<\/p>\n","protected":false},"author":62,"featured_media":16965,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40973","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\/40973","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=40973"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40973\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16965"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=40973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=40973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=40973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}