The Euro (EUR) is expected to move between 1.1625 and 1.1660, according to UOB Group analysts. Over a longer period, the EUR is stabilizing, likely between 1.1600 and 1.1700. In the last 24 hours, the EUR traded closely between 1.1634 and 1.1661, closing slightly higher at 1.1642. This suggests we’re in a range-trading phase, with expectations to keep trading between 1.1625 and 1.1660 today. Looking ahead one to three weeks, the recent movements of the EUR indicate a recovery after earlier weaknesses. The trading range is expected to stay narrow, now forecasted between 1.1600 and 1.1700. The FXStreet Insights Team gathers views from market experts, offering both commercial analyst notes and insights from various analysts. This includes the latest currency movement updates and expectations. In January 2025, we believed that the EUR/USD pair had entered a stabilization phase. We expected the pair to trade in a tight range of 1.1600 to 1.1700, but this did not hold throughout the year. Our tight range prediction was off, as the European Central Bank started a more aggressive rate-hiking cycle in the third quarter of 2025 to address ongoing inflation. This resulted in a significant increase in the Euro’s strength, pushing the pair above 1.1700 and toward 1.2000 by the end of the year. The market is now adjusting to these changes. Fast forward to January 2026, and we see a different situation. Recent Eurozone inflation data showed a stubborn 3.1%, while the latest U.S. Non-Farm Payrolls report indicated a cooling labor market. This may lead the Federal Reserve to consider rate cuts sooner than the ECB, creating uncertainty about the future direction of the pair. Implied volatility for EUR/USD options has hit a six-month high, signaling that the market expects larger price swings in the coming weeks. Traders are anticipating a significant breakout rather than the calm, range-bound environment seen in early 2025. With the expected movement and lack of clear direction, traders might want to use strategies that benefit from volatility. A long straddle, which involves buying both a call and a put option at the same strike price, is suitable for this scenario. This strategy will be profitable if the EUR/USD makes a big move in either direction before options expire. For a cheaper option, a long strangle could work well. This approach involves buying an out-of-the-money call and an out-of-the-money put option. While it requires a larger price move to become profitable, it fits the current market sentiment that a breakout is more likely than continued consolidation.

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