US flash S&P Global PMI figures for February are due on Friday at 14:45 GMT. January’s Composite PMI was 53, and February is expected to rise as manufacturing and services output increases.
The flash Manufacturing PMI is forecast at 52.6 versus 52.4 in January. The flash Services PMI is forecast at 53 versus 52.7, and services represent about two-thirds of the US economy.
Technical Levels To Watch
EUR/USD was last near 1.1765 and is trading close to support at 1.1766. The 20-day EMA is at 1.1818, with price below it, while the 14-day RSI is 45 after falling from above 70.
If EUR/USD closes above the 20-day EMA, it may move towards the 11 February high of 1.1927. If it stays below the EMA, attention may turn to the 22 January low at 1.1670.
The Services PMI is a monthly survey-based indicator of US services activity. Readings above 50 point to expansion and below 50 point to contraction, and the data can foreshadow trends in GDP, industrial output, jobs, and inflation.
The US Services PMI data just released came in stronger than expected, showing the largest part of the economy continues to expand at a healthy pace. This immediately strengthened the US Dollar, pushing EUR/USD below the key 1.1766 support level. The market is now interpreting this as another sign that the Federal Reserve has no reason to consider rate cuts anytime soon.
Trading Implications And Strategy
This strong services report, combined with the slightly higher core inflation numbers we saw for January 2026, reinforces the view that US interest rates will remain elevated. Looking back, we saw the Federal Reserve stay on a hawkish path throughout much of 2025 because of similar persistent strength. This policy divergence is likely to widen, especially as the European Central Bank has hinted at potential easing due to industrial weakness in Germany.
For traders, this increases the appeal of strategies that benefit from a stronger dollar or a weaker euro. Given the clear break of technical support, buying EUR/USD put options to target the January 22nd low of 1.1670 could be a viable strategy in the coming weeks. Implied volatility may rise slightly on this data, making option selling strategies like covered calls on euro-long positions attractive for those looking to generate income.
We saw a similar dynamic in mid-2023, where a strong services sector kept the dollar bid even as other parts of the economy cooled. That period led to a steady grind in currency pairs rather than a volatile collapse. Therefore, consider using strategies like bear put spreads on the EUR/USD, which define risk while profiting from a gradual move lower.
