The Euro is stable around the mid-1.16 range against the US Dollar as Monday’s North American session starts. This comes after a period of consolidation, with the Euro holding its recent values. Schnabel from the European Central Bank has hinted at a possible rate hike in the future, affecting short-term rate markets. These markets are shifting away from their previous dovish stance, now considering a slight chance of a hike in the medium term. The yield spreads between the Euro area and the US are also supporting the Euro, showing positive movement compared to earlier figures. Recent Euro-area data is strong, highlighted by October’s industrial production rising by 1.8% month-over-month, much higher than the expected 0.3%. The Relative Strength Index is bullish, nearly reaching 60, as the Euro consolidates around 1.16. If it breaks through the 50-day moving average at 1.1609, there may be gains towards 1.17, with little resistance at that level. Anticipated resistance lies above 1.18, and in the near term, we expect the Euro to trade between 1.16 and 1.17. Currently, the Euro is stable against the dollar, holding in the mid-1.16s. The technical outlook is positive, as the price has risen above its 50-day moving average of 1.1609, suggesting that recent consolidation may support further gains. Hawkish comments from the European Central Bank are boosting this strength, signaling a potential rate hike. Recent data indicates Eurozone inflation was a stubborn 3.1% in November 2025, significantly above the ECB’s target and higher than the US rate of 2.7%. This difference makes holding Euros more appealing. Given this outlook, we recommend buying call options on the EUR/USD for the upcoming weeks. A strike price around 1.1700, expiring in late January 2026, would take advantage of a possible rise toward the 1.1800 resistance level. This strategy defines risk while allowing for potential gains if the Euro continues to rise. We’re not alone in this perspective; the latest CFTC report shows speculative funds are increasing their net long positions in the Euro. However, traders should be cautious, as liquidity often decreases towards the end of December. This situation can lead to quieter markets or sudden, sharp price changes on low volume.

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