Insights 
VT 
The EUR/USD exchange rate has risen for the sixth day in a row as the US Dollar’s comeback slows down. The Euro benefits from robust German inflation data and strong signals from the European Central Bank (ECB).
The US House of Representatives plans to vote on legislation to end the government shutdown. If approved, the bill will move to President Trump for final approval, funding most federal agencies until January 2026 and some until September 2026.
German Inflation Data And ECB Signals
Germany’s Harmonized Index of Consumer Prices rose 0.3% monthly and 2.3% annually in October, aligning with forecasts. ECB policymaker Isabel Schnabel stated the Eurozone’s economy shows positive momentum, with inflation potentially rising, but interest rates are currently well-positioned.
Trades are closely watching US developments and the planned Eurozone Industrial Production report. Delayed US data issues, including the Consumer Price Index, fuel market caution regarding the Federal Reserve’s policy direction.
Today’s currency data reveals the US Dollar is weaker against several currencies, especially the Japanese Yen. The heat map displays percentage changes of major currencies against each other, with the US Dollar showing varied performance across different pairs.
With the EUR/USD pushing higher for six straight days, we believe the immediate momentum favors the Euro. We are looking at short-term bullish option strategies, such as buying December 2025 call options, to capitalize on a potential break above the 1.1600 resistance level. This approach allows us to participate in the upside while defining our maximum risk.
Euro Strength And US Political Dynamics
The Euro’s strength seems well-supported, as recent Eurostat flash estimates for early November showed core inflation holding firm at 2.8%, well above the European Central Bank’s target. This contrasts sharply with the situation in the US, where the government shutdown has now delayed the October CPI report, making the Federal Reserve’s next move highly uncertain. The lack of fresh US inflation data is a key factor weighing on the dollar.
We should be cautious about the US government shutdown vote, as a resolution could trigger a “buy the rumor, sell the fact” rebound for the dollar. We saw a similar dynamic after the record 35-day shutdown ended in January 2019, where the dollar saw a brief relief rally as fiscal uncertainty temporarily faded. Therefore, any long EUR positions should be managed with tight risk parameters around the vote.
The current political tension has kept implied volatility elevated, making selling options premium an interesting proposition for those who expect a smooth resolution. A bull put spread on EUR/USD with a January 2026 expiration could be a viable strategy, profiting from both a modest rise in the pair and a decline in volatility. However, we must remember the funding bill is a short-term patch lasting only until late January 2026, meaning this entire political drama is likely to resurface.
