EUR/USD rose for a second session and traded near 1.1820 during Asian hours on Monday. The 14-day RSI is 51, which is neutral, after moving back above the midpoint.
If the RSI rises into the mid-50s, upside momentum may strengthen. If it drops below 50, downside risk may increase and shift focus to support levels.
Daily Chart Trend Context
On the daily chart, the pair is still above the 50-day EMA, which supports the broader bullish bias. The nine-day EMA is flat near the current price, which may cap near-term follow-through.
EUR/USD is trading around the nine-day EMA at 1.1820. A daily close above this level could strengthen the bullish bias and open the way toward 1.2082, the highest level since June 2021.
A close below the nine-day EMA could bring the 50-day EMA at 1.1775 into focus. A break below the 50-day EMA could add downside pressure toward 1.1578, the two-month low set on 19 January.
EUR/USD is also stuck in a tight range around 1.1820, right on the nine-day moving average. This key technical level comes as the ECB and the Fed send mixed signals in early 2026. The lack of direction suggests the market is waiting for a clear catalyst before choosing a trend.
Options Strategy For Breakout Risk
The RSI stabilizing near 51 and the flat moving average suggest the recent low-volatility phase may be nearing its end. In 2025, similar consolidations often led to sharp breakouts. Current data points the same way: the Deutsche Bank Euro Currency Volatility Index (EUVIX) has risen to 8.5, its highest level in three months.
With uncertainty rising, buying options can be an effective way to prepare for a larger move. One approach is a long strangle, where you buy an out-of-the-money call and an out-of-the-money put. This strategy can profit from a breakout in either direction, without needing to correctly predict which way the pair will move.
For bullish traders, the latest Eurozone flash CPI for January 2026 came in at 2.1%, which may push the ECB to keep a hawkish tone. Buying call options with a strike near 1.1850 could be a direct way to position for a move toward the 1.2082 resistance. The aim is to enter before market conviction builds and option premiums rise.
If the pair closes back below 1.1820, a bearish view becomes more likely. The latest US jobs report showed 195,000 jobs added, but wage growth slowed, sending mixed signals that could still support the dollar. Buying put options with a strike near 1.1775 could target a move toward 1.1578, the two-month low.
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