EUR/USD slipped slightly in Asian trading on Monday, trading near 1.1870. The 14-day RSI is 56. It remains above 50 after falling back from overbought territory.
On the daily chart, the pair is still trading above the nine-day EMA, which is trending higher. The nine-day EMA is also above the rising 50-day EMA. The nine-day EMA level is 1.1861.
Key Technical Levels
If price stays above 1.1861, EUR/USD could climb toward 1.2082, the highest level since June 2021.
A move below the nine-day EMA could pull the pair down toward the 50-day EMA at 1.1769. Below that, the next support is 1.1578, the two-month low set on 19 January.
The technical analysis was produced with the help of an AI tool.
EUR/USD is testing an important support area at the nine-day EMA near 1.1861. With the RSI holding above 50, momentum is still positive, which suggests any pullbacks may be limited. This level is a key decision point for strategies in the weeks ahead.
Options Strategy Considerations
Given this setup, we can consider buying call options with a strike price below the 1.2082 target, as long as EUR/USD holds above 1.1861 on a daily closing basis. This view is supported by recent Eurozone data showing January headline inflation holding at 2.9%. That has led to more hawkish comments from ECB officials. Markets are now pricing in a higher chance that the ECB will cut rates later than the US Federal Reserve.
However, if we get a clear break and daily close below 1.1861, we should be ready to change our bias quickly. In that case, buying put options targeting the 50-day EMA at 1.1769 could be a sensible way to hedge or position for further downside. A break of short-term support may signal a deeper correction.
This setup looks similar to the price action seen in Q4 2025, when a consolidation above moving averages was followed by a strong move. At the same time, last week’s US retail sales showed a mild slowdown, which may point to a softer dollar versus the euro. For that reason, 1.1861 remains the main trigger to watch for the next derivatives trade.
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