EUR/USD stays firm amid Iran talks, hawkish Fed tone
- EUR/USD consolidates as renewed US-Iran tensions lift the Dollar.
- Strong US labor and firm regional data reduce dovish Federal Reserve expectations.
- Weak German ZEW and softer Eurozone output weigh on the Euro outlook.
EUR/USD falls modestly during the North American session after reaching a daily low of 1.1804 amid a risk-off impulse that underpinned the Greenback as tensions between the US and Iran, remain high. At the time of writing, the pair trades at 1.1845 down 0.07%.
Euro steadies lower amid risk-off flows, resilient US labor data and reduced Fed easing expectations
Nuclear talks between Tehran and Washington resumed on Tuesday yet both parties failed to reach a deal, but progress has been achieved, according to Axios mentioning a White House official.
Nevertheless, tensions remain high as the US sent a fleet to the Middle East, to exert pressure on Iran to make concessions.
Employment in the US strengthens, Fed speakers tilt hawkish
The economic docket in the US featured jobs figures, business activity data in the New York Fed region, along with speeches by Federal Reserve officials. The ADP Employment Change 4-week average improved, hinted the labor market strength, with figures improving from a 7.8K upward revised print, to 10.3K, revealed Automatic Data Processing (ADP).
The New York Empire State Manufacturing Index in February dipped from 7.7 to 7.1 but exceeded forecasts for a deterioration to 6.
Given the fundamental backdrop along with last week’s strong US Nonfarm Payrolls report, it pushed traders to trim dovish bets on the Federal Reserve, for the whole year. Data from Prime Market Terminal shows that investors had priced in 57 basis points of easing towards the end of 2026.
Fed officials crossed the wires. San Francisco Fed Mary Daly was hawkish as she said that inflation is above target. Fed Governor Michael Barr said that neutral rates have risen slightly but not dramatically, and that the Fed can take its time in monetary policy.
Chicago’s Fed President Austan Goolsbee said that there’s have been some progress on inflation, but said that if inflation runs persistently high, then policy is looser than they otherwise would be. He sees 3% as a loose neutral estimate.
In Europe, the fundamental view has not changed much as the German ZEW Economic Sentiment revealed that investors’ morale fell in February after reaching a five-year peak in the previous month. The ZEW Index fell to 58.3 below economists’ estimates of 65.0.
Other data revealed that Industrial production in the Eurozone (EZ) slowed by 1.2% YoY in December 2025 from 2.2% in the previous month, slightly below forecasts of 1.3%.
All in all, the EUR/USD seems poised to edge lower, even though the Fed is projected to reduce rates by at least 50 basis points, while the European Central Bank (ECB) would hold rates steady.
US and EZ economic schedule on February 18
Wednesday’s economic docket in the Eurozone will feature speeches by ECB’s Mario Cipollone and Isabel Schnabel. Across the pond, traders focus shift to US Durable Goods Orders, housing data, Industrial Production and the FOMC January’s meeting minutes.
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.16% | 0.60% | 0.40% | 0.17% | -0.19% | -0.33% | 0.23% | |
| EUR | -0.16% | 0.44% | 0.27% | 0.02% | -0.36% | -0.49% | 0.06% | |
| GBP | -0.60% | -0.44% | -0.44% | -0.42% | -0.80% | -0.93% | -0.38% | |
| JPY | -0.40% | -0.27% | 0.44% | -0.24% | -0.59% | -0.74% | -0.15% | |
| CAD | -0.17% | -0.02% | 0.42% | 0.24% | -0.42% | -0.50% | 0.05% | |
| AUD | 0.19% | 0.36% | 0.80% | 0.59% | 0.42% | -0.12% | 0.43% | |
| NZD | 0.33% | 0.49% | 0.93% | 0.74% | 0.50% | 0.12% | 0.56% | |
| CHF | -0.23% | -0.06% | 0.38% | 0.15% | -0.05% | -0.43% | -0.56% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
EUR/USD technical outlook: Consolidates around 1.1850, awaits FOMC minutes
In the daily chart, EUR/USD trades at 1.1852. The 50/100/200-day simple moving average set trends higher. Price holds above the rising reference line at 1.1769, maintaining a positive medium-term tone. The RSI prints 54 (neutral), holding above the 50 midline as momentum consolidates. A descending trend line from 1.2082 caps gains, with resistance at 1.1863. A daily close above that barrier could extend the recovery and improve the upside profile.
On the downside, the rising trend line from 1.1585 defines the bullish structure, with support aligned near 1.1873. RSI holding above 50 would keep dips contained, while a drop back below the midline would soften momentum. A sustained rejection at the descending trend-line barrier would keep consolidation in place, whereas a clear break above it would reinstate trend-following bids.
(The technical analysis of this story was written with the help of an AI tool.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
