The Euro (EUR) has been steady recently, trading around 1.1752. This stability comes as the Consumer Price Index (CPI) rose to 2.2% year-over-year, matching expectations. Comments from European Central Bank (ECB) officials suggest they see balanced inflation risks, indicating the end of the ECB’s rate-cutting cycle might be near. Looking at the daily chart, there’s a slight bearish trend losing momentum, and the Relative Strength Index (RSI) remains steady. The Euro is expected to stay within its recent range, with immediate resistance at 1.1810 and 1.1920, and support at 1.1640/70, 1.16, and 1.1460. French Prime Minister Sebastien Lecornu has dismissed the idea of a wealth tax and plans to reduce the budget deficit to 4.7% of GDP by early October 2026. Early polls show only 16% positive opinion for Lecornu, leading to an uncertain outlook. The Netherlands will hold General Elections on October 29, which could impact the Euro in the short term. However, the overall fundamentals appear to support buying the Euro during market dips. As of October 2nd, 2025, the Euro trades quietly around 1.1750 against the dollar. The recent Eurozone inflation figure of 2.2% was expected and did not disrupt the market, marking a shift from the aggressive rate hikes seen in 2023. We believe the ECB’s rate-cutting cycle has likely come to an end, with the main interest rate holding steady at 3.00% last month. This steady rate provides a solid base for the Euro, indicating its yield won’t decline further compared to others, lending support to a buy-on-dips strategy. However, short-term political risks could cause the Euro to dip. Recent polls show that only 16% of the public supports the new French Prime Minister, which raises questions about his ability to pass the 2026 budget. Additionally, the upcoming Dutch election on October 29 looks uncertain, potentially leading to market nervousness. This mix of solid fundamentals and short-term political risks suggests the Euro will remain within a range. For derivative traders, selling options could be a good strategy. Consider selling cash-secured put options with a strike price near the key support level of 1.1640 to reap premiums. The Dutch election could also trigger a significant price move in late October. Traders might want to buy short-dated straddles targeted around the October 29th election date to benefit from potential big price swings after the results. Any politically driven dips towards the 1.1600 to 1.1640 support zone should be seen as chances to enter bullish positions. If the Euro holds these levels and breaks the immediate resistance at 1.1810, it could then move toward the 2025 high of around 1.1920.

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