EUR/USD Developments
Throughout Friday’s Asian trading session, the EUR/USD pair has remained in a precarious position, trading slightly above the mid-$1.1700s. This puts it in close proximity to the nearly one-month low reached just a day prior.
Recent U.S. macroeconomic data indicates a surprisingly resilient labor market. Alongside some hawkish remarks from the Federal Open Market Committee’s January meeting and comments from Federal Reserve officials, this has compelled investors to temper their expectations for significant policy easing. Rising geopolitical tensions have also supported the safe-haven U.S. dollar, pushing it up to its highest value since January 23, which contributes to downward pressure on the EUR/USD exchange rate.
At the same time, renewed speculation regarding potential interest rate cuts by the European Central Bank appears to be further undermining the euro and applying additional strain on the EUR/USD ratio. Traders are now on the lookout for upcoming preliminary PMIs from both the Eurozone and the U.S., hoping to identify short-term trading opportunities. Nevertheless, attention remains fixated on the preliminary Q4 GDP figures and the Personal Consumption Expenditures (PCE) price index for the U.S., as these might provide new direction.
Analyzing the technical aspects, the EUR/USD pair currently finds itself positioned below the significant levels of 1.1780 and 1.1770. A downturn seems plausible, especially given that this range includes the 200-period simple moving average on the 4-hour chart and the 61.8% Fibonacci retracement from the January swing low. This area could act as a pivotal point, hindering any recovery attempts amid a bullish trend for the USD.
Additionally, the Moving Average Convergence Divergence (MACD) remains below the signal line and the zero mark, while the negative histogram is decreasing, indicating that the downward momentum could be easing. The relative strength index (RSI), currently at 29, suggests that the currency pair is oversold. Although the short-term outlook feels fragile, an oversold RSI combined with a stabilizing MACD might favor a corrective rebound if momentum picks up. Should this recovery happen, it could target the 50% retracement level around 1.1828.
If market sentiment allows the pair to rise above that threshold, it could shift the overall tone positively. However, if that level cannot be regained, sellers may seize control during the recovery phase.
Upcoming Economic Indicators
The composite Purchasing Managers Index (PMI) is a key metric assessing private business activity across manufacturing and services in the euro area. This index is derived from a survey of senior executives, with responses weighted by company size and sector contribution. Changes reported reflect the current month’s performance compared to the previous one and can serve as an early indicator for trends in GDP, employment, industrial production, and inflation.
The PMI fluctuates between 0 and 100, with 50 indicating no change. Readings above 50 suggest economic expansion, which is generally a positive signal for the euro, while below 50 points to contraction, typically viewed as negative.
Next release: Friday, February 20, 2026, 09:00 (Prel)
Frequency: Monthly
Consensus: 51.5
Previous: 51.3
