Created on March 02, 2026

The Euro has been very choppy during the month of February as traders are trying to figure out where the two central banks are heading at the moment.

EURUSD

The Euro has been very choppy during the month of February as traders continue to try to sort out what the outlook is going to be for the Federal Reserve and the US dollar. Quite frankly, this pair will probably move on what goes on in Washington DC rather than anything on the continent of Europe, at least as far as I can see looking forward.

The Federal Reserve is thought to be potentially cutting rates 2 times later this year, but the reality is that the United States economy—not only the inflationary numbers but also the labor numbers—have made it not as certain as it once was. This has been the story for 2 years now where the market starts to try to price in the idea of the Federal Reserve cutting aggressively and the reality is something quite different.

Resistance and Monetary Policy

This is not to say that the US central bank is going to start hiking rates, but the reality is that it is not as dovish as a lot of people would have thought. With that being the case, I think you have to look at this as a pair that most likely will be choppy in the month of March as well. If we do rally, the 1.23 level is a major resistance barrier going back several years and it is at least in theory the measured move of the consolidation area that we have been in since last summer.

Quite frankly, this is all about the US dollar as I mentioned previously and I really don’t have an opinion on the Euro because we know that the European Central Bank is likely to be flat for the rest of the year as far as its monetary policy is concerned and economic growth, or lack of growth in the European Union depending on the country that you are talking about, is a bit of a mixed picture.

Ultimately, there are a lot of geopolitical concerns that could work in the favor of the US dollar so I believe that unless the Euro can break the 1.20 level during the month of March it is likely to remain a very tight market that you will be looking for fading signs of exhaustion.