EUR/USD exchange rate stays above 1.1800 as traders await Eurozone and US statistics
by VT Markets
/
Feb 4, 2026
EUR/USD is currently around the 1.1815 mark as traders await important economic data. The Eurozone’s Harmonized Index of Consumer Prices (HICP) is expected to drop to 1.7% year-over-year (YoY) in January, down from 1.9%. Meanwhile, core inflation is predicted to stay steady at 2.3% YoY. The European Central Bank (ECB) sees this change as temporary, suggesting no urgent policy shifts.
In the US, traders are looking forward to the ADP report on private-sector jobs and the ISM Services PMI. However, the influence of these reports might be limited as focus remains on the upcoming ECB policy meeting. A global dip in risk sentiment supports the US Dollar, yet 2026 expectations for rate cuts by the Federal Reserve may limit USD strength.
EUR/USD is sensitive to differing policies from the ECB and the Fed, which could create short-term trading chances. Key economic indicators, like the HICP from Eurostat, offer important insights. Typically, a rising HICP boosts the Euro, while a lower reading hurts it. The upcoming data release on February 4, 2026, will be closely monitored.
With EUR/USD stabilizing around 1.1815, we see this as a buildup ahead of key data releases. Today’s flash Eurozone inflation numbers and US employment data might trigger short-term volatility. The current market expects minimal movement, presenting a chance for traders ready for a breakout.
The ongoing policy differences between the central banks are crucial for the weeks ahead. Notably, Eurozone core inflation lingered above 3% for much of late 2025, while the latest US data indicates a cooling trend, with January 2026 core PCE at 2.6%. This suggests that the Federal Reserve has more room to cut rates, which could bolster the EUR/USD pair.
In the short term, with the ECB meeting soon, strategies that benefit from increased volatility are appealing. We are considering straddles or strangles—buying both call and put options—to profit from a significant price move in either direction after the announcements. This approach allows us to benefit from a breakout without needing to predict its exact direction.
Looking ahead, we anticipate a potential upward move, fueled by possible Fed rate cuts. We are interested in buying call options with strike prices above recent highs, possibly aiming for the 1.2000 level. A bull call spread could also effectively position us for a gradual rise while managing our risk.
However, we must stay cautious, as the support around 1.1775 is a crucial line. A significant drop below this level would challenge our bullish view and could indicate that the dollar’s safe-haven appeal is overtaking the policy divergence. We’re using this level to structure our trades and may consider protective put options if we expand our long positions.
EUR/USD Chart AnalysisEurozone HICP Overview
