The EUR/USD rate briefly went above 1.1800 in late December but is now under pressure again. If the support level of 1.1680 fails, the rate might decline toward 1.1640–1.1600. This shift is being influenced by global events and upcoming data from the US. **Recent Changes in Dutch Pension Reforms** The recent changes to Dutch pension reforms could affect European asset markets. These reforms may cause shifts in EUR swap rates as funds switch from defined benefit to defined contribution systems. Notably, the increase in the 10-30 year EUR swap curve last year could impact shorter-term rates and potentially support the euro. We might see a steady EUR/USD rate in the first quarter of the year. However, the euro could start gaining ground in the second quarter, thanks to German fiscal stimulus. The FXStreet Insights Team shares market insights from both experts and analysts. Currently, the EUR/USD pair faces pressure, similar to early 2025 when it struggled to stay above 1.1800. Today, it trades much lower and is struggling to remain above 1.0750. The support levels we’re monitoring are significantly lower than last year’s 1.1680 floor. Recent data from late 2025 suggests a stronger dollar, with a jobs report indicating 216,000 new positions and core inflation at 3.9%. This contrasts with the Eurozone, where German industrial production in November 2025 unexpectedly declined. This difference strengthens the case for a stronger dollar compared to last year. **German Fiscal Stimulus and Eurozone Growth** The expected boost from German fiscal stimulus, which was hoped to raise the euro in 2025, has not fully offset weak growth. This puts the European Central Bank in a tougher spot compared to the US Federal Reserve. The gap in policies is now a major theme, surpassing last year’s concerns about Dutch pension fund flows. In the coming weeks, this situation suggests that EUR/USD might fall further. We believe that buying out-of-the-money put options expiring in March offers a solid risk-managed strategy. Targeting strikes around the 1.0600 level could provide useful protection and profit potential if the current support breaks. Implied volatility in the pair has stayed low, making options a cost-effective way to express a directional view. A clear break below the 1.0720 support level could lead to a swift decline, similar to sharp drops seen in the third quarter of 2023. This makes holding bearish positions through derivatives a better approach than shorting the spot market directly. Create your live VT Markets account and start trading now.

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