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03/02/26
13
Euro Recovers Modestly Amid US Trade Wins and Strong Data
The Euro (EUR) has shown a modest recovery against the US Dollar (USD) on Tuesday, rising to approximately 1.1815 after dipping to 1.1776 the previous day. Following a significant decline of around 1.5% over the past two sessions, the euro benefited from supportive US trade developments and easing geopolitical tensions.
A notable factor in recent currency movements has been positive sentiment surrounding US trade relations, notably the announcement of a deal with India that will reduce tariffs on Indian imports from 50% to 18%. This development bolstered confidence in the U.S. economy’s resilience. Additionally, regional geopolitical developments appeared to calm markets; Iran’s commitment to initiate nuclear negotiations with the US contributed to a less tense regional environment, indirectly supporting the US dollar.
Market participants also reacted to strong macroeconomic indicators from the US. The ISM Manufacturing PMI exceeded expectations, rising to 52.6 in January, its highest level in over three years, and surpassing forecasts of 48.5. The S&P Global Manufacturing PMI was revised upward to 52.4, reinforcing the picture of a recovering manufacturing sector. These reports, coupled with trade optimism, offset concerns about a delayed release of upcoming U.S. labor market data caused by a partial government shutdown.
Investors remain attentive to upcoming economic events, including the European Central Bank’s Lending Survey, which will shed light on credit conditions in the Eurozone, and a speech by Federal Reserve official Michelle Bowman. Technical analysis indicates that the EUR/USD remains predominantly bearish overall. Despite a recent bounce above support levels around 1.1770, momentum remains tentative, with resistance near 1.1875 and key targets at 1.1975 and the psychological 1.2000 level. Support at 1.1770 continues to be a critical juncture, with a decisive break below risking further downside toward recent lows near 1.1665.
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