The euro remains steady against the US dollar, with EUR/USD hovering near 1.0500, as traders assess the currency pair’s next move amid shifting economic and monetary policy expectations. While recent pressure has kept the euro on the defensive, a break above this key level could accelerate bullish momentum, setting the stage for further upside.
The US dollar continues to hold firm, supported by higher Treasury yields and expectations that the Federal Reserve will keep interest rates elevated for an extended period. Market participants remain focused on the upcoming US inflation data, which could provide further clarity on whether the Fed will maintain its cautious stance or signal potential policy adjustments.
EUR/USD 1-D Chart as of February 12th, 2025 (Source: TradingView)
Meanwhile, the euro’s upside remains limited, as the European Central Bank (ECB) has adopted a more neutral stance, with policymakers waiting for additional economic data before signaling their next move. While inflation in the Eurozone has been cooling, concerns over sluggish growth and weak demand have weighed on the common currency.
From a technical perspective, EUR/USD needs a decisive break above 1.0500 to trigger a stronger upside push. If buyers gain control, the pair could target resistance around 1.0550, while failure to clear this level may lead to renewed selling pressure, dragging the pair back toward 1.0450 support.
Investors will be watching US inflation data and ECB commentary for potential catalysts. A softer-than-expected inflation reading in the US could weaken the dollar, allowing EUR/USD to move higher, while any hawkish Fed signals could reinforce downside risks.
For now, EUR/USD remains at a key technical juncture, with 1.0500 acting as the next barrier to further gains. Unless sentiment shifts decisively in favor of the euro, the pair could continue to trade in a narrow range, waiting for clearer policy signals from both central banks.
