EUR/USD traded near 1.1775 on Tuesday, after rebounding from a one-month low last week. The US Dollar found support when Fed minutes showed officials were split on the path for interest rates.
Markets priced almost no chance of a rate cut in March, and about an 80% chance of no change in April. Fed Chair Jerome Powell’s term expires in May.
Fed And Ecb Policy Divergence
The ECB was seen as essentially on hold, with inflation close to its 2% target. ECB President Christine Lagarde confirmed she will serve her full term.
US Consumer Confidence data and several Fed speeches were due on Tuesday. Traders also pointed to delayed US jobs and inflation reports later this week as key near-term drivers.
On the daily chart, EUR/USD was down 0.12% and was trading near the 50-day EMA around 1.1775. The pair has fallen from the January high near 1.2080, a drop of about 300 pips.
It remained above the rising 200-day EMA at 1.1585, close to the early-January swing low near 1.1580. The Stochastic Oscillator turned lower and moved toward oversold levels.
Key Support And Resistance Levels
Support was noted at 1.1750 and 1.1700. If the decline continues, 1.1578 is the next level to watch. A move back above 1.1830 would shift focus to 1.1900–1.1950.
A correction note dated February 24 at 16:35 said the move lower happened on Tuesday, not Monday.
At this point in 2025, EUR/USD was struggling near 1.1775, held back by uncertainty about the Federal Reserve’s next steps. Today, with the pair holding above 1.2150, that uncertainty has turned into a clear policy split that supports the Euro. The Fed has started a slow easing cycle, while the European Central Bank remains on hold.
The split in Fed views seen in 2025 later led to rate cuts as US inflation cooled. Recent data shows US CPI has dropped to 2.5%, which has allowed the Fed to keep a more dovish stance. This contrasts with the Eurozone, where inflation is still firmer at 2.7%, making it harder for the ECB to consider rate cuts.
With the uptrend now in place, derivatives traders may look to position for more Euro strength. The moving-average indecision seen in 2025 has given way to steadier momentum. Long call options or bull call spreads may be attractive because they offer upside exposure while limiting risk if US data surprises to the upside.
It is also worth watching the longer-term technical setup, which has changed since last year. The 200-day moving average, which supported price near 1.1585 in early 2025, has now moved higher and may act as a floor around 1.1900. Traders can use this level as a possible strike area for selling puts to earn premium, or as a trigger level to reassess bullish positions.
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