The Euro (EUR) might dip a bit, but it is unlikely to drop below the key support level at 1.1680. Analysts from UOB Group predict a long-term downward trend for the EUR, aiming towards 1.1680.
In the short term, the Euro traded between 1.1713 and 1.1764, ending at 1.1719, a drop of 0.22%. While further decreases are possible, breaking the 1.1680 support level is not expected. Resistance levels are at 1.1735 and 1.1750.
Looking at the medium term, the Euro reached 1.1807 last month before retreating. This pullback shows some momentum but not enough for a lasting decline. The focus is on a possible dip to 1.1680. If the Euro falls below this point, it could drop to 1.1650. The current downward pressure will continue unless it breaks the strong resistance level at 1.1775.
The FXStreet Insights Team offers market observations from both well-known and independent analysts.
Reflecting on past analysis from 2025, the market looked at 1.1680 as a major support level for the Euro, pointing to a slight downward trend that was part of a bigger picture. Today, with the EUR/USD around 1.0950, the situation has shifted dramatically.
Recent data from last week showed that Eurozone inflation for December 2025 rose to 2.8%, slightly exceeding expectations. This ongoing inflation keeps European Central Bank (ECB) officials sounding cautious, reducing the likelihood of rate cuts in the near future.
Meanwhile, the latest U.S. jobs report showed a strong but cooling labor market, giving the Federal Reserve more flexibility. This diverging approach—where the ECB stays rigid while the Fed considers easing—puts pressure on the Euro. Historically, such policy differences can lead to lasting currency trends.
For derivative traders, the current environment makes buying EUR/USD put options an appealing strategy in the coming weeks. With implied volatility near the lows seen in much of 2024, buying options to speculate on a drop to 1.0800 is fairly inexpensive. This strategy offers a way to position for further Euro weakness with defined risk.
The key upside level to monitor is around 1.1000, which has been significant resistance over the past month. As long as the Euro stays below this level, the downward path seems more likely. Any short-term rallies to this resistance could be seen as chances to take new bearish positions.
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