Technical Levels And Trend
If those supports break, the next major area is the 100-week simple moving average at 1.1165. On the daily chart, the nearest support is the 1 August 2025 swing low at 1.1391. A break below 1.1391 brings the 29 May 2025 daily low at 1.1210 into view. If weakness continues, the 12 May 2025 low at 1.1065 is the next level to watch. Looking back at the analysis from late 2025, we saw a strong bearish bias form in the EUR/USD after it broke below its 200-day moving average. That sentiment appears justified, as the fundamental picture has since confirmed a weakening Euro. The technical breakdown we observed then was the start of a more significant move. The core of the issue is diverging central bank policy, which has become clearer in early 2026. With the latest US inflation data from February 2026 holding firm at 3.2%, the Federal Reserve is maintaining a restrictive stance with rates at 4.75%. In contrast, the European Central Bank, facing weaker growth, made a 25 basis point cut in January 2026, bringing its main rate to 2.75%.Fundamental Drivers And Trade Ideas
This interest rate difference makes holding US dollars more attractive than euros, pressuring the pair lower. Recent economic data further supports this, with final Q4 2025 US GDP growth at a solid 2.3% annualized rate, while the Eurozone composite PMI for February 2026 dipped to 48.9, indicating a contraction in business activity. This economic divergence gives traders a fundamental reason to expect continued Euro weakness. For derivative traders in the coming weeks, this environment favors strategies that profit from a falling EUR/USD. Buying put options with strike prices below the current market level offers a clear way to speculate on further downside. Alternatively, selling out-of-the-money call spreads can generate income by betting the pair will not rally significantly. The key support levels identified back in 2025 remain highly relevant targets for these positions. As we approach mid-March 2026, the 1.1300 and the more significant 100-week moving average, which was noted at 1.1165, are the next logical areas of interest. A decisive break below these levels could accelerate the selling pressure. Create your live VT Markets account and start trading now.
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