EUR/USD Weekly Analysis – February 2026

Overview#

EUR/USD extended its rally from 1.0850 to 1.0920 last week, gaining roughly 70 pips. Softer-than-expected US retail sales pressured the dollar midweek, while hawkish comments from ECB board member Isabel Schnabel reinforced expectations that the ECB would hold rates steady in March, supporting the euro.

Heading into this week, the pair sits just below the 1.0950 resistance ceiling that has capped price action since December. Whether bulls can sustain a breakout or sellers defend that level will define the trajectory for the rest of February.

Technical Analysis#

Support and Resistance Levels#

• Strong Resistance: 1.0950 – Key resistance tested since December
• First Resistance: 1.0920 – Last week's high
• First Support: 1.0850 – 50-day moving average
• Strong Support: 1.0780 – Rising trendline

Key Chart Patterns#

On the daily chart, EUR/USD is forming an ascending triangle with higher lows converging toward flat 1.0950 resistance — a traditionally bullish pattern suggesting accumulation. The apex falls in the second half of this week, raising the probability of a decisive breakout.

On the 4-hour timeframe, the pair trades within a rising channel with support near 1.0860 and resistance near 1.0940. A break above the channel would align with the triangle breakout and reinforce the bullish case toward 1.1000.

Indicators#

RSI (14) reads 58 on the daily chart, maintaining bullish bias without entering overbought territory. A move above 60 alongside a break past 1.0950 would confirm buying momentum.

MACD histogram is positive and expanding above the signal line. The MACD line crossed above the signal line in early February and the spread continues to widen, signaling accelerating upward momentum.

Bollinger Bands are narrowing on the daily timeframe, with bandwidth at its lowest since early January. Tight bands historically precede sharp directional moves — traders should prepare for increased volatility once the squeeze resolves.

Moving Average Analysis#

All four EMAs are stacked in bullish order (20 > 50 > 100 > 200) with price above all of them. The 20 EMA at 1.0895 acts as dynamic intraday support. As long as the pair holds above the 50 EMA at 1.0852, the medium-term uptrend remains intact. A daily close below the 100 EMA would signal a structural shift toward bearish territory.

Fundamental Analysis#

Key data this week:

• Tuesday: US Consumer Confidence Index — Consensus expects a slight decline to 104.5 from 105.3. A weaker print would weigh on the dollar.
• Wednesday: Eurozone CPI (Flash Estimate) — Markets forecast headline inflation at 2.3% YoY. A higher-than-expected reading strengthens the ECB's hawkish stance and supports EUR.
• Thursday: US Q4 GDP (Revised) — The preliminary reading came in at 2.4%. An upward revision would be dollar-positive; a downward revision adds to growth concerns.
• Friday: US Personal Consumption Expenditure (PCE) — Core PCE is expected at 2.7% YoY. This is the Fed's preferred inflation gauge and the most market-moving release of the week.

The PCE inflation data will be decisive for Fed rate decisions. A core PCE print above 2.8% would push back rate-cut expectations and strengthen the dollar, while a reading at or below 2.6% would revive hopes for a June cut and pressure the greenback.

Dollar Index (DXY) Correlation#

EUR/USD and the Dollar Index (DXY) share a strong inverse correlation (typically -0.92 to -0.98). Last week DXY pulled back from 104.20 to 103.80, directly supporting the EUR/USD rally. A clean break below 103.60 would likely accelerate EUR/USD toward 1.0950 and beyond. If DXY rebounds and reclaims 104.20, expect selling pressure on EUR/USD toward 1.0850.

Trader Sentiment#

Retail positioning data shows approximately 62% of retail traders are net short EUR/USD — a contrarian bullish signal, as retail crowds tend to fade trends.

On the institutional side, the latest CFTC Commitment of Traders report shows asset managers increasing net long euro positions by 8,200 contracts to 143,600 — the highest in three months. The alignment between contrarian retail signals and institutional accumulation reinforces the bullish technical setup.

Weekly Strategy#

The ascending triangle and bullish moving-average alignment favor upside continuation, but the heavy economic calendar demands flexibility.

• Bullish trigger: A daily close above 1.0950 confirms the triangle breakout. Initial target 1.1000, extended target 1.1040. Trail stops below the 20 EMA.
• Bearish trigger: A daily close below 1.0850 invalidates the triangle and exposes 1.0780. Extended downside target at 1.0720 near the 200 EMA.