#TradFi交易分享挑战

The euro-to-US dollar (EURUSD) outlook for 2026 is firmly driven by the deep divergence in the monetary policy paths of the two major economies. Since last year, the interest-rate gap between the European Central Bank and the Federal Reserve has widened to historically rare levels, which has kept EURUSD under long-term pressure; but recently, the price action has begun to reveal changes that are worth paying attention to.

At present, market expectations for the European Central Bank’s rate path are more dovish than those for the Federal Reserve. Eurozone inflation fell back to around the 2% target by the end of 2025, but economic growth has remained sluggish. In particular, the weakness in Germany’s manufacturing sector has not shown any fundamental improvement, and the automotive and chemical industries face structural challenges. This gives the European Central Bank ample reason to keep cutting interest rates. Market pricing shows that within the year there will be at least two additional 25-basis-point rate cuts in the Eurozone. By contrast, although the Federal Reserve is also in a rate-cutting cycle, the resilience of non-farm payroll data and the maintenance of wage growth have raised the bar for further cuts. The interest-rate differential factor continues to support the US dollar, which is also the fundamental reason why EURUSD has not yet been able to effectively break free from the 1.07–1.09 range.

However, there is a limit to interest-rate differential trading. According to CFTC data, current euro short positions have already built up to a relatively extreme high. Once any marginal change appears, the risk of a short-covering-driven short squeeze is rising. In fact, the recently released Eurozone services PMI unexpectedly rebounded, indicating that consumer-related demand may recover first, while US consumer credit data shows signs of slowing. This subtle push-and-pull shift has been detected by some sharp-sensing capital. Meanwhile, the United States’ large twin deficits and the repeated back-and-forth over the debt ceiling are also, over the long term, eroding the foundation of the dollar’s credit.

From a technical perspective, the monthly chart for EURUSD shows a bottom divergence that is worth being alert to. After prices probed the 0.95–1.00 area twice in 2022 and 2025, even though they failed to rebound sharply, the RSI indicator’s lows have been gradually rising—an unmistakable signal that downward momentum is weakening. On the weekly chart, the exchange rate is attempting to form the right shoulder of a head-and-shoulders bottom, with the neckline located roughly in the 1.0950–1.1000 area. If in the future the exchange rate can break through this resistance zone with strong volume, it would confirm the head-and-shoulders bottom pattern, and the theoretical target would point to above 1.14. But if support at 1.07 is lost again, the pattern would be invalidated, and the time spent consolidating and building the base would be extended.

In terms of trading strategy, two clearly different approaches are possible at present. For right-side traders, patience is required: wait until there is a valid break above 1.10 before entering longs. For left-side traders, they can build long positions in batches within the 1.07–1.08 range, using 1.06 below as a strict stop-loss, betting on a medium-term reversal. When do you think EURUSD can truly move out of the bottom? Feel free to share your views
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