EUR\/USD slipped during North American trade, after touching 1.1804 and later trading near 1.1845, down 0.07%. Risk-off moves supported the US Dollar as US\u2013Iran tensions stayed elevated, despite resumed nuclear talks on Tuesday and reports of progress.<\/p>\n
The US also sent a fleet to the Middle East. US data showed firmer labour conditions, with the ADP Employment Change 4-week average rising to 10.3K from an upward revised 7.8K.<\/p>\n
The New York Empire State Manufacturing Index eased to 7.1 from 7.7, above the 6.0 forecast. Markets reduced expectations for Federal Reserve rate cuts; Prime Market Terminal showed 57 basis points of easing priced towards end-2026.<\/p>\n
In the Eurozone, Germany\u2019s ZEW Economic Sentiment fell to 58.3 from a prior five-year high, below the 65.0 estimate. Eurozone industrial production growth slowed to 1.2% YoY in December 2025 from 2.2%, under the 1.3% forecast.<\/p>\n
For February 18, the Eurozone calendar includes ECB speeches by Mario Cipollone and Isabel Schnabel. In the US, focus is on Durable Goods Orders, housing data, Industrial Production, and the FOMC minutes.<\/p>\n
The divergence between the US and Eurozone economies seems to be widening, which supports a stronger Dollar against the Euro. We saw the January 2026 Nonfarm Payrolls report add a blockbuster 350,000 jobs two weeks ago, reinforcing the idea of a resilient US economy. This strength makes it very difficult for the Federal Reserve to consider aggressive rate cuts anytime soon.<\/p>\n
In contrast, the outlook for the Euro is weakening due to sluggish economic data from its core. Looking back, we saw German factory orders fall sharply at the end of 2025, a trend that is clearly weighing on the Eurozone’s industrial engine. This economic softness suggests the European Central Bank will be far more hesitant to tighten policy, creating a clear policy difference with the Fed.<\/p>\n
Given this backdrop, we should consider buying put options on the EUR\/USD pair to position for a potential move lower, perhaps targeting strikes below the 1.1800 level. The upcoming release of the January FOMC minutes is a major catalyst that could confirm the Fed\u2019s hawkish stance and trigger the next leg down. This strategy allows us to define our risk while gaining exposure to a downward move.<\/p>\n
The renewed tensions between the US and Iran are also adding a layer of uncertainty that benefits the safe-haven Dollar. Implied volatility on EUR\/USD options might begin to rise, which means we should act before it gets too expensive to place these trades. We are seeing the VIX, a measure of market fear, creep up from its recent lows below 14, signaling that traders are getting nervous.<\/p>\n
From a technical standpoint, the pair is consolidating, but the descending trend line near 1.1863 is acting as strong resistance. We could use a break below the recent low of 1.1804 as a trigger to add to short positions or bearish option structures. Until that break occurs, selling out-of-the-money call options with strikes above 1.1950 could be a prudent way to collect premium.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD dips as risk-off USD gains on US\u2013Iran tensions; data firms, Eurozone sentiment and output soften.<\/p>\n","protected":false},"author":62,"featured_media":16960,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42130","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\/42130","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=42130"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42130\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16960"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}