EUR/USD Weekly Price Forecast: 1.18 Support Tested as US Data Storm Arrives

EUR/USD – volatility, liquidity stress and what the 1.18 zone really means

EUR/USD – current price zone and how the range is built

EUR/USD is trading around 1.18–1.1820 after a week that pushed up toward 1.1875 on Monday and then faded lower. Price is sitting in the upper band of the recent structure, with a working corridor roughly between 1.1780 on the downside and 1.1900 at the top. That is still the highest sustained region since 2021, which tells you straight away that the dominant move of the last quarters has been USD weakness, even if the last two weeks felt like a grind. The previous week left a heavy rejection candle under 1.19, but the pair has not broken back below 1.1780; the market is consolidating high in the range, not unwinding the trend. Trading spreads are wider, intraday swings are harsher, but the pair is holding where a weaker dollar regime usually lives, not where a strong dollar regime lives.

EUR/USD – compressed US data calendar and event risk around 1.1780–1.1900

The near term is defined by a compressed US macro calendar. Because of the brief government shutdown, key numbers that normally spread across the month are now stacked into a few days. Non-farm payrolls for January are scheduled for 11 February, CPI for 13 February, with retail sales in between. That cluster decides whether US yields stay around current levels or break higher again. Every move inside 1.1780–1.1900 is positioned around those dates. Pushes into 1.1870–1.1900 are used to reduce EUR longs ahead of CPI risk, while drops into the low-1.18s are being bought by accounts that still run a medium-term weaker-USD play. If jobs and inflation both surprise on the strong side, EUR/USD can spike back toward 1.17 quickly, but the main question is whether that spike is a regime change or just another reset inside the broader trend.

EUR/USD – US policy stance and why the dollar is not allowed to run too strong

Fundamentals out of the US are still solid: manufacturing data beat expectations, labour indicators remain firm, and consumer sentiment is improving. That combination keeps 10-year US yields hovering above roughly 4.2–4.3%, which gives the dollar enough carry to fight back whenever there is a liquidity scare. At the same time, Washington’s policy stance under the current Trump administration is not aligned with a “strong-USD at any cost” view. The Treasury team led by Bessent is comfortable with a somewhat softer dollar because it supports exports, offsets tariff friction and helps domestic earnings. Markets understand that the political preference is for a weaker USD over the medium term, even while the data pulse is strong. This is why EUR/USD can trade above 1.18 despite resilient US macro prints: the rate story and the policy story are pulling in opposite directions. That tension produces volatility, but it also stops the dollar from regaining the kind of dominance that would drag the pair back to 1.05–1.08.

EUR/USD – spillover from gold and silver liquidation into FX positioning

The destruction of positioning in precious metals is a direct input for EUR/USD flows. Gold spiked to almost $5,600 an ounce, then collapsed toward $4,400 in days, and now struggles every time it approaches $5,000. Silver dropped close to 50% from its peak. Those moves are not slow reallocations; they are forced liquidations in crowded anti-USD trades. When leveraged longs in gold and silver are being cut because of margin calls and CME margin hikes, capital is raised wherever it can be raised. That includes EUR/USD longs that were part of the same macro basket: weaker dollar, higher metals, higher risk assets. This is one of the reasons the pair stalled under 1.19 despite the structural USD story. The market is still cleaning up the excess leverage that built up when gold and silver were vertical. Once that clean-up is further advanced and volatility in metals keeps compressing, EUR/USD loses one of its major headwinds.

EUR/USD – IBIT, Bitcoin and the risk-on channel into the currency market

Crypto is another transmission channel that matters for EUR/USD, and IBIT – the iShares spot Bitcoin ETF – is a useful gauge. Bitcoin fell through $70,000, briefly printed below $65,000, and now trades in the high-$60,000s. That move has been accompanied by more mixed flows in IBIT: strong one day, flat or negative the next. During the earlier leg higher, when BTC was breaking to records and IBIT saw persistent inflows, the pattern was simple: US money was willing to add risk in crypto, tech and growth stocks at the same time. That pattern usually went together with a weaker dollar and a EUR/USD grind higher. The current regime is different. The sharp drawdown in BTC and the IBIT flow wobble signal de-risking, heavier cash balances and more demand for USD on corrections. Until IBIT goes back to consistent inflows on rallies and BTC trades comfortably above $70,000 again, EUR/USD will not have the same risk-on tailwind. The pair can still rise on rate differentials and policy, but it no longer rides a clean global liquidity wave.

EUR/USD – euro area fundamentals versus the Fed–ECB rate path

On the euro side, growth is mediocre but stabilising. The euro area is not delivering breakout data, yet it is also not signalling a new recession shock. The European Central Bank is not in a hurry to slash rates aggressively, especially while wage growth and services inflation remain sticky. Market curves still price a world in which the Federal Reserve eventually cuts more than the ECB once the current inflation bump is absorbed. That relative path is the backbone of the move that lifted EUR/USD from the 1.05–1.08 band into the high-1.10s and then the 1.18–1.19 region. As long as that expected differential stays in place, every dip toward 1.17–1.18 faces demand from real-money and reserve-type players building long-euro exposure. Only a structural shift – for example, a re-pricing that says the Fed will keep policy decisively higher than the ECB deep into 2027 – would justify a break back below 1.16 on a lasting basis.

EUR/USD – structure of the chart and the critical levels to respect

The technical picture in EUR/USD is not clean, but it is readable. On the weekly timeframe, the pair printed a strong rejection candle under 1.19 last week, with the high near 1.1875 and a long upper wick. That candle confirmed that the 1.1875–1.1900 zone is the active resistance band and that chasing breakouts above it before US data carries poor risk/reward. On the downside, support around 1.1780 has been tested but not broken on a weekly close. The working speculative band for this week remains roughly 1.17825 to 1.19020. As long as closes hold above 1.1780, the structure still shows a high-level consolidation after a trend move up, not a reversal. A daily spike below 1.1780 ahead of CPI would not change that; what matters is whether a weekly close lands below that area. A weekly close under 1.1780 opens space for a drift toward the mid-1.16s. A weekly close back above 1.1875–1.1900 would confirm that the consolidation is finished and that the next leg toward the low-1.20s is underway.

EUR/USD – geopolitical overlay from Iran, Russia and energy dynamics

Geopolitics sits in the background but still feeds into EUR/USD pricing. US–Iran tension has moderated on headlines that talks in Oman are “going well,” which has taken some safe-haven premium out of the dollar and out of gold at the same time. That said, the situation can flip rapidly. Any breakdown in those talks, or a sudden escalation in the region, would produce a classic rush into USD, Treasuries and short-term funding instruments. On the Eastern front, the Russia–Ukraine war continues into a fourth year. Sanction regimes are moving, including debates about Russian energy exports and the role of gold reserves inside Russia’s borders. Energy flows and sanctions enforcement affect European growth and trade balances more directly than US growth. So far, markets treat Europe’s hit as manageable and have not repriced the euro as a crisis currency. If that changed – for example, if energy prices spiked in a way that hit European industry harder than US industry – EUR/USD would feel it quickly through weaker growth expectations and softer demand for EUR assets.

EUR/USD – stance: buy, sell or hold at 1.18–1.1820

Taking all of this together, EUR/USD at roughly 1.18–1.1820 is not in a clean trend leg, but the balance still leans in one direction. The pair trades high in its recent range, above levels that marked the stronger-USD regime of the last few years, with the macro and policy backdrop still favouring a softer dollar over the multi-quarter horizon even as near-term US data are firm. The metals and crypto liquidations that drove a wave of forced selling are well advanced. The key risk in the very short term comes from US jobs and CPI data clustered in the coming days; those releases can easily knock 80–120 pips off EUR/USD in a single session. The critical line is around 1.1780 on a weekly close. Above that level, EUR/USD remains a Buy with a bullish tilt: dips toward 1.1780–1.1800 are entry zones for adding EUR exposure with an eye toward a retest and eventual break of 1.1875–1.1900 and a move into the low-1.20s as volatility cools. A sustained weekly close below roughly 1.1780 would downgrade the stance to Hold, shift focus toward the mid-1.16s, and force a reassessment of just how much tightening the market is starting to price back into the Fed curve.

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