EUR/USD fell on Monday and moved towards 1.1850 ahead of the US session. Trading stayed within the recent range as market activity remained low.
Eurozone Industrial Production dropped 1.4% in December. November was revised to 0.3% growth from 0.7%.
Eurozone Output Update
Year-on-year output rose 1.2% in December versus a 1.3% forecast. November’s annual growth was 2.2%.
The pair stayed range-bound after softer US CPI data on Friday. Markets were closed in many Asian centres for Lunar New Year, and US markets were shut for President’s Day.
Later, markets were set to watch remarks from Fed Vice Chair for Supervision Michelle Bowman and ECB Governor Joachim Nagel. The week ahead was described as heavy on data.
On the 4-hour chart, EUR/USD tested an upward trendline support near 1.1855. Another support level was the 11 February low at 1.1833.
Technical Levels To Watch
MACD was slightly below zero and RSI was below 50, pointing to weaker momentum. A break under 1.1833 could open a move to 1.1775, while resistance levels were 1.1890 and 1.1925.
We remember seeing similar setups back in 2025, when the Euro struggled to hold the 1.1850 level against the dollar. That price now seems like a distant memory, as the pair currently trades much lower, hovering around the 1.06 handle. The underlying bearish sentiment described then has only intensified over the past year.
The economic divergence has become much clearer since that time. Recent data from late 2025 showed Eurozone industrial production contracting by another 0.5% in December, while the latest US jobs report for January 2026 added a robust 215,000 positions. This confirms a trend of European weakness versus American resilience, putting sustained pressure on the common currency.
For derivative traders, this suggests that bearish positions remain favorable. Buying puts on the EUR/USD with strike prices near 1.05 could be a direct way to position for a break of the recent lows in the coming weeks. The persistent low volatility also makes long-dated options relatively cheap, offering a good risk-to-reward ratio.
Looking back further, we saw the EUR/USD break below parity in 2022 amid the energy crisis, a move driven by a similar gap in economic outlooks. That historical precedent shows that a fundamentally driven trend can push the pair significantly lower than many expect. Therefore, structuring trades that profit from a move towards 1.04 or even lower is a logical response to the current environment.
