EUR\/USD has recovered all of its March losses and has moved back to around 1.18. This came as markets reduced expectations for an ECB rate rise in April, while a June rise remains fully priced.<\/p>\n
The ECB is expected to keep the option of a rate rise open while it assesses different outcomes. The minutes from the 19 March ECB meeting are due, followed by comments from several ECB speakers in Washington.<\/p>\n
ING says it is cautious about buying EUR\/USD at current levels around 1.18. It sees a possible fall back towards 1.1700 if negative news emerges.<\/p>\n
The article states it was produced with help from an artificial intelligence tool and reviewed by an editor.<\/p>\n
Looking back to this time in 2025, we saw EUR\/USD recover to 1.18 as the market looked past an April rate hike from the European Central Bank. The ECB did deliver that priced-in June hike, but the landscape today is vastly different. We are now navigating a world where central bank policy is diverging sharply.<\/p>\n
Currently, with EUR\/USD trading around 1.0850, the debate has completely shifted from hikes to the timing and pace of cuts. Recent Eurozone inflation data for March 2026 came in at 2.6%, slightly hotter than expected but still on a clear downward path from the cycle highs. This contrasts with stickier US inflation, which latest readings show holding above 3%, keeping the Federal Reserve on hold.<\/p>\n
For derivative traders, this divergence creates opportunities in directional bets. Given the ECB is expected to cut rates before the Fed, buying EUR\/USD put options with strikes around 1.0700 for June expiry offers a clear way to position for further downside. This strategy allows traders to profit from a falling euro while strictly defining their maximum risk to the premium paid for the option.<\/p>\n
Volatility is also a key consideration, as implied volatility for EUR\/USD has ticked up to 7.8% from lows around 6% seen earlier this year. For those believing the pair may consolidate before the next major move, selling a strangle by writing out-of-the-money puts and calls could be effective. This position profits from time decay as long as the currency pair remains within a defined range.<\/p>\n
Just as we were cautious about chasing the rally up to 1.18 in 2025, traders now should be wary of a significant rebound without a fundamental shift. The main risk to a bearish euro position is a sudden weakening in US economic data, which would accelerate Fed rate cut expectations. This could cause a sharp upward move in the pair, squeezing short positions.<\/p>\n","protected":false},"excerpt":{"rendered":"
EUR\/USD rebounds to 1.18 as ECB April hike odds fade; ING warns pullback risk to 1.1700.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45118","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45118","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45118"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45118\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}