Created on February 06, 2026

• The Euro has been slightly negative during fairly quiet trading on Thursday, as the ECB rate decision has come and gone.
• At this point, the market looks like it is ready to make a decision.

The Euro has been slightly negative during fairly quiet trading on Thursday despite the fact that we had an ECB decision. Ultimately, not much changed. That is not a huge surprise because quite frankly, that is what we had anticipated. So, we are just hanging around the 1.18 level, and we will have to look through this market through the prism of what the US dollar is doing.

During the trading session, it has been a touch stronger against Europe and a touch weaker against Asia—at least some Asia. So, with that being said, I think we have a potential for a move to the upside on any type of momentum breaking above the 1.1850 level.

Binary Choice for Momentum

If we break above there, then the 1.20 level would be the target. If we break down from here, then we will test the 50-day EMA. If we were to break down below the 50-day EMA, then it opens up the Euro to go to the 1.16 level, which is just sitting right around the 200-day EMA.

We are essentially in the middle of a binary choice like this, so that being said, if we see some type of momentum, I think we have a couple of targets ahead of us based on those. We will have to wait and see how Friday plays out, but as things stand right now, we still have a situation where we broke out of consolidation, we pulled back to retest that previous resistance. Now the question is, will we find buyers to push this thing to the upside?

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.