EUR\/USD hovers around the 1.1815 level as traders anticipate key economic data. The Eurozone’s Harmonized Index of Consumer Prices (HICP) is projected to show a decrease to 1.7% YoY in January, down from 1.9%. The core inflation rate is expected to remain at 2.3% YoY. The European Central Bank perceives this as a temporary change, implying no immediate policy change.<\/p>\n
In the US, traders await the ADP report on private-sector employment and the ISM Services PMI. The impact of these reports may be limited as attention remains on the upcoming ECB policy meeting. Global risk sentiment softens, lending strength to the US Dollar. However, expectations of further rate cuts by the US Federal Reserve in 2026 could limit the USD’s strength. <\/p>\n
The EUR\/USD remains sensitive to the ECB and Fed’s divergent policy outlooks, which may influence short-term trading opportunities. Economic indicators such as the HICP, released by Eurostat, provide critical insights. Generally, a higher HICP is positive for the Euro, while a lower reading negatively impacts it. The upcoming data release on February 4, 2026, will be closely watched.<\/p>\n
Given the tight consolidation in EUR\/USD around the 1.1815 level, we see this as a period of accumulating pressure ahead of key data releases. With the flash Eurozone inflation figures and US employment data due today, we expect a potential spike in short-term volatility. The market is currently pricing in very little movement, creating an opportunity for those positioned for a breakout.<\/p>\n
The underlying policy divergence between the central banks remains the most critical factor for the coming weeks. We recall how Eurozone core inflation remained stubbornly above 3% for much of late 2025, while recent US data showed a clearer cooling trend, with the latest figures from January 2026 showing US core PCE at 2.6%. This reinforces the view that the Federal Reserve has more room to cut rates, a narrative that should continue to support the EUR\/USD pair.<\/p>\n
For the immediate term, with the European Central Bank meeting tomorrow, options that benefit from an increase in volatility are attractive. We are considering straddles or strangles, which involve buying both a call and a put option, to capitalize on a significant price move in either direction following the announcements. This strategy allows us to profit from a breakout without having to predict the exact direction of the move.<\/p>\n
Looking out over the next few weeks, our bias is for a move higher, driven by the prospect of Fed rate cuts. We are exploring purchasing call options with strike prices above the recent highs, potentially targeting the 1.2000 psychological level. A bull call spread could also be an effective way to position for a gradual climb while defining our risk.<\/p>\n
However, we must remain cautious, as the support level around 1.1775 is a clear line in the sand. A decisive break below this area would challenge our bullish outlook and could signal that the safe-haven appeal of the dollar is overpowering the policy divergence theme. We are using this level as a key point to structure our trades and consider buying protective put options if we build a larger long position.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD steadies near 1.1815 as traders await Eurozone inflation data and key U.S. economic reports.<\/p>\n","protected":false},"author":62,"featured_media":16962,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40883","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-ca\/wp-json\/wp\/v2\/posts\/40883","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=40883"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40883\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16962"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=40883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=40883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=40883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}