EUR/USD fell on Monday and slipped toward 1.1850 ahead of the US session. Trading stayed inside the recent range as volumes remained light.
Eurozone industrial production fell 1.4% in December. November was revised to a 0.3% gain from 0.7%.
Eurozone Output Update
Output rose 1.2% year over year in December, slightly below the 1.3% forecast. November’s annual growth was 2.2%.
The pair stayed range-bound after softer US CPI data on Friday. Many Asian markets were closed for Lunar New Year, and US markets were shut for President’s Day.
Later, traders were set to focus on comments from Fed Vice Chair for Supervision Michelle Bowman and ECB Governor Joachim Nagel. The week ahead was expected to be data-heavy.
On the 4-hour chart, EUR/USD tested support on an upward trendline near 1.1855. Another support level was the 11 February low at 1.1833.
Technical Levels To Watch
MACD was slightly below zero and RSI was under 50, both pointing to weaker momentum. A break below 1.1833 could open the door to 1.1775. Resistance levels were 1.1890 and 1.1925.
We saw a similar setup in 2025, when the euro struggled to hold 1.1850 against the dollar. That level now feels far away, with the pair trading much lower near 1.06. The bearish tone from then has only strengthened over the past year.
The economic gap has become clearer since that time. Data from late 2025 showed Eurozone industrial production down another 0.5% in December. By contrast, the US jobs report for January 2026 showed a strong 215,000 new positions. This mix of European softness and US resilience has kept pressure on the euro.
For derivatives traders, that backdrop still favors bearish positioning. One way to express this view is by buying EUR/USD puts with strikes near 1.05, aiming for another push below recent lows in the coming weeks. Low volatility can also make longer-dated options cheaper, which may improve the risk-to-reward profile.
Looking further back, EUR/USD broke below parity in 2022 during the energy crisis, driven by a similar gap in economic outlooks. That episode shows how fundamentals can push the pair much lower than many expect. In this environment, trades structured to benefit from a move toward 1.04—or lower—can be a rational response.
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