EUR\/USD fell for a second day and traded near one-week lows around 1.1830. The pair extended a downtrend from last week\u2019s 1.1925 high, with pressure increasing after ZEW survey data.<\/p>\n
Germany\u2019s ZEW Economic Sentiment Index slipped to 58.3 in February from 59.6 in January, versus a forecast of 65.0. The current situation measure improved to -65.9 from -72.7, missing the -65.7 consensus.<\/p>\n
The Eurozone Economic Sentiment Index fell to 39.4 from 40.8, against expectations of 45.2. German HICP showed a 0.1% monthly decline in January, while annual inflation rose to 2.1% from 2.0% in December.<\/p>\n
The US Dollar held a mild upward bias as US markets returned from a long weekend. Traders watched the New York Empire State Manufacturing Index, with Fed minutes due Wednesday and US GDP and PCE inflation data due Friday.<\/p>\n
Technically, EUR\/USD broke support from mid-January and tested 1.1830. On a 4-hour chart, MACD stayed negative and RSI dropped below 40, with support at 1.1775 and resistance near 1.1870 and 1.1890.<\/p>\n
Looking back to this time in 2025, we saw the EUR\/USD pair under significant pressure due to deteriorating economic sentiment in the Eurozone. Today, on February 17, 2026, the narrative is shifting as recent data points towards a tentative recovery. For instance, the latest German industrial production figures for December 2025 showed a modest 0.4% rebound, suggesting the worst of the slowdown may be behind us.<\/p>\n
The speculation around European Central Bank easing that dominated last year has now flipped entirely. With the Eurozone’s core Harmonized Index of Consumer Prices (HICP) holding at 2.5% in the January 2026 reading, we believe the market is now underpricing the odds of a hawkish turn from the ECB later this year. This contrasts sharply with the dovish sentiment seen throughout 2025.<\/p>\n
On the other side of the pair, the US Dollar’s mild bullish tone from early 2025 has faded. The Federal Reserve has held rates steady for the past two meetings, and the most recent US jobs report for January showed wage growth cooling to a 3.1% annual rate, its slowest pace since mid-2024. This supports the view that the Fed’s tightening cycle has definitively ended.<\/p>\n
For derivative traders, this environment suggests it is time to reconsider bearish positions on the Euro. We see value in purchasing medium-term EUR\/USD call options with strike prices above the 1.2000 level to position for a potential breakout later this spring. Historically, when monetary policy divergence begins to narrow between the Fed and ECB, the EUR\/USD has entered multi-month uptrends, as seen in the period following 2021.<\/p>\n
Given this setup, we expect implied volatility in the pair to increase as the market digests the opposing central bank outlooks. Selling out-of-the-money puts on the EUR\/USD could be an effective strategy to collect premium while expressing a cautiously bullish view. This strategy benefits from both a potential rise in the spot price and time decay if the pair remains range-bound in the immediate term.<\/p>\n","protected":false},"excerpt":{"rendered":"
EUR\/USD slipped near 1.1830 as weak ZEW sentiment fueled euro selling; traders awaited Fed minutes, US data.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42084","post","type-post","status-publish","format-standard","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\/42084","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=42084"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42084\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}