The Euro is currently up 0.5% against the US Dollar. It is seeing gains amid a weakened USD, influenced by government bond markets and US fiscal developments.

The European Central Bank’s changing stance, focusing away from easing, also plays a role. Key events for the Euro this week include preliminary PMI releases and Germany’s IFO business sentiment report.

Technical Overview Of Euro

EUR/USD is increasing but hasn’t reached new highs yet. The Relative Strength Index is bullish but below 70, suggesting room for further growth.

Potential resistance for the Euro is near 1.14, and recent highs are in the upper-1.15 range. Support is anticipated around 1.11.

We’ve seen the Euro edge higher, gaining around half a percent against the Dollar, with broader weakness in the greenback acting as a tailwind. That’s not random—there’s a backdrop here of softer US bond yields, which have dipped following a shift in market positioning around Treasury issuance and ongoing deficit concerns from Washington. Those fiscal anxieties aren’t just chatter—they’re reflected in real price movements across sovereign debt markets, and the Dollar’s reaction is telling.

From Frankfurt, recent signals suggest that the ECB may be stepping away—at least for now—from further rate cuts or highly accommodative rhetoric. That tone adjustment is also feeding into the Euro, giving it some underlying support on policy differentials alone. It’s not a hawkish pivot per se, but it does remove one of the Euro’s recent headwinds.

In terms of economic releases, this week isn’t light. The preliminary purchasing managers’ indices for the Eurozone will offer insight into how both manufacturing and services are holding up. On top of that, the IFO business climate survey will give an update on sentiment within Europe’s largest economy. If PMI data comes in either comfortably above or below expectations, we may find that FX and rates traders recalibrate implied macro forecasts quickly.

Market Reactions And Strategy

Technically, EUR/USD is making a gradual move higher, yet hasn’t cleared any major breakout levels. The RSI tells us there’s buying interest, without yet entering overheated territory—it’s under 70, so not in the overbought zone. That can be read as space for further upside, especially if no resistance zones are breached too fast, allowing momentum to remain orderly.

We’re watching resistance in the region of 1.14, which may act as a cap if buyers lose confidence. That ceiling stretches up toward recent peaks above 1.15, but that zone hasn’t been threatened just yet. In contrast, if retracement gathers pace, anchor levels lie nearer to 1.11, where previous short-term support was found. That 1.11 area worked before and may once again be tested if weakness returns suddenly.

Options data has started to reflect some bullish expectations, though nothing extreme. The skew and premium patterns we track have widened slightly in the Euro’s favour, suggesting short-dated contracts are being positioned for a move higher, without full conviction. We’ll be paying attention to how volatilities shift after the PMI numbers drop. Illiquid reactions could open up temporary mispricings, especially if positioning is already one-sided.

Cross-asset signals—historically reliable—remain helpful. European yields need monitoring. If bund yields climb further while Treasuries soften, expect broader flows into the Euro to persist.

As always with currency derivatives, pricing disconnections won’t last long. If you’re short volatility, gamma management will become particularly important this week. Those playing directionally through spread structures may want to consider adjusting strikes and expiries based on timing around these economic events. We’ve seen before how Europe’s morning data can change the tone well before the New York open.

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