EUR/USD steadied after a small fall linked to US jobs data, and it entered Thursday’s North American session slightly higher. Analysts said the move showed signs of stabilisation.
Yield spreads continued to recover and moved back towards the multi-year high last seen in late December and early January. Spread correlations also improved, pointing to a shift back towards fundamental drivers.
The broader technical trend has remained bullish since February 2025. Recent gains paused above 1.19, near 1.1920.
Resistance is seen just above 1.19, with little resistance flagged before 1.20. Near-term trading was expected to stay within 1.1850 to 1.1950.
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The Euro appears to be stabilizing and we see the overall technical picture as bullish. The trend that started in February 2025 remains intact, suggesting further strength against the US dollar. Our focus is now on the psychologically important 1.20 level as the next major target.
Fundamentally, the move is supported by yield spreads between German and US bonds, which are recovering toward their multi-year highs. For instance, the German-US 10-year yield spread has recently narrowed to -125 basis points, its tightest point since early 2025. This suggests capital flows may increasingly favor the Euro, as higher-than-expected Eurozone inflation of 2.5% last month pressures the ECB.
For derivative traders, this outlook supports buying call options with a 1.20 strike price expiring in the coming weeks, such as in March or April 2026. This strategy allows for participation in the expected upward move beyond the current resistance near 1.1920. The recent minor dip after last week’s strong US jobs report of 220k is being seen as a buying opportunity.
Alternatively, traders with a moderately bullish view could consider selling put options. Selling a March 2026 put with a strike price around the 1.1850 support level would be a way to collect premium. This strategy profits if the EUR/USD stays above this level, aligning with the view that the underlying trend is strong.
Looking back, we see this bullish conviction has been building for a year, with the Euro steadily climbing since early 2025. The recent pause just above 1.19 seems temporary, as the market digests its gains before a potential new leg up. There is very little significant technical resistance before the 1.20 barrier, a level we have not consistently traded above since late 2024.
