The EUR/USD is near the 1.19500 level as of this writing with fast conditions still shaking the broad Forex market, this as the currency pair traverses within values it has not seen since June 2021 in a sustained manner.
Some EUR/USD speculators certainly made solid profits the past month. Those who felt the EUR/USD was still underbought as this past month started have been possibly rewarded, this if they were participating in the Forex markets instead of merely talking about them around the dinner table. In the past ten days the EUR/USD has gone from essentially the 1.16300 mark on the 19th of January to the 1.19500 ratio it now demonstrates on the 29th of January.
However, Forex is not a simple wagering game, and for traders who believed the EUR/USD should be higher, intraday conditions were not only fast – but they were violent as well. So timing the moment the EUR/USD was going to surge higher was a rather lucky endeavor for most. Yes, some folks may have known the EUR/USD was about to become volatile and burst higher, but they are unlikely to make themselves known. The EUR/USD has importantly, it must be added, correlated to the broad Forex market.
Noise and Recognition of a Weaker USD
The USD centric weakness in the broad Forex market has been widespread. The ability of the EUR/USD to climb above and challenge the 1.20000 level in yesterday’s trading momentarily was likely welcomed by backers of the European Union who see this as some type of psychological victory against the U.S, but the surge higher had more to do with mere disagreements with the U.S about Greenland and other concerns. The USD/EUR after touching yesterday’s highs it needs to mentioned, has reversed slightly lower.
The U.S Federal Reserve held their interest rate policy in place yesterday, but this might change in the coming months as leadership is replaced. The notion that the U.S administration may actually want a weaker USD too is important to consider. And traders should not give into the temptation to believe the USD has suddenly lost its luster as a reserve currency. Dislike of the U.S with bias against the nation doesn’t mean the U.S is suddenly less important for the global economy.
The Move Higher and Financial Institutions
The move higher by the EUR/USD mirrored other major currencies gaining against the USD.
- Financial institutions may believe there is still upside to pursue in the EUR/USD, but the volatility seen the past handful of days is likely to start eroding and conditions should start to look more tranquil than they have been.
- As the month of February gets started and targets are looked for, day traders will now have to consider the possibility that a less frantic upside will be seen.
- Meaning incremental targets will have to be wagered upon.
EUR/USD Outlook for February 2026:
Speculative price range for EUR/USD is 1.18400 to 1.21200
The trading conditions experienced the past couple of weeks in Forex are unlikely to continue in a solid manner during February. Consideration about the upper tier for the EUR/USD needs to be thought about, but also the notion that financial institutions may believe the currency pair gained too fast. Support levels around the 1.19000 should be watched, if this level holds over the near-term and into the first week of February this could be a signal additional upside is being considered by financial institutions.
The ability of the EUR/USD to go over the 1.20000 may be a precursor for things to come in the next handful of weeks, but day traders are urged not to get too ambitious and limit their targets to realistic goals. Cashing out winnings is important, this before what is being seen via their trading screens suddenly disappears when reversals occur. After a strong surge higher the EUR/USD must now contend with questions about its capability to sustain its levels. There may be some volatility left in the EUR/USD and broad Forex markets that traders have to contend with in the weeks ahead.