EUR/USD continues to show solid short-term strength, gaining more than 1.00% over the past three trading sessions. This steady move higher reflects a renewed bullish bias in recent price action as the pair approaches yearly highs.
The upside momentum is largely driven by market positioning ahead of the upcoming U.S. Non-Farm Payrolls (NFP) report and its potential impact on monetary policy. At the same time, the neutral stance of the European Central Bank has helped maintain confidence in the euro. If expectations for Federal Reserve rate cuts continue to build while the ECB remains neutral, buying pressure in EUR/USD could intensify in the coming sessions.
NFP Day Approaches: Key Catalyst for EUR/USD
On February 11, the United States will release its latest NFP employment data. Forecasts indicate that 66,000 new jobs were added in January, compared to 50,000 in December. If confirmed, this would signal a gradual recovery in employment following the sharp contraction at the end of 2025, when job losses exceeded 100,000.
This release is particularly important for assessing U.S. dollar strength. One of the main reasons the Federal Reserve began cutting interest rates was the weakness observed in the labor market late in 2025, which ultimately weighed on the dollar.
If the NFP data fail to meet or exceed expectations, it could reinforce the perception that the slowdown in U.S. employment persists. Such an outcome may prompt the Fed to reconsider maintaining a neutral interest rate policy in upcoming decisions.
Market-implied probabilities already reflect growing uncertainty. There is currently a 78.4% probability that rates will remain unchanged at the March 18 meeting. However, expectations for the April 29 decision have shifted, with the probability of a neutral stance falling to 57.3% from 70% just a week ago. This decline highlights increasing market indecision and opens the door to a potential lower-rate scenario, depending on how employment data evolve.
A lower-rate environment would reduce the attractiveness of dollar-denominated investments, potentially weighing further on the U.S. dollar in the short term. If this dynamic continues, the euro could extend its recovery, supporting sustained buying pressure in EUR/USD.
European Central Bank Maintains Neutral Stance
Beyond developments in the United States, the European Central Bank remains firmly in neutral territory. Market-implied probabilities indicate an 83.6% chance that interest rates will remain unchanged at 2.00% at the March 17 meeting.
Additionally, expectations for rates to stay in neutral territory remain above 50% through October 2026. This suggests the ECB does not currently foresee an aggressive rate-cutting cycle, in contrast to what could unfold in the United States.
This outlook of prolonged policy neutrality has supported stability in European fixed-income markets and helped maintain confidence in the euro. As long as the ECB avoids meaningful surprises, this stance may continue to underpin short-term demand for the euro.
Technical Analysis: Bullish Structure Re-Emerging
Despite recent volatility in EUR/USD price swings, the pair has maintained consistent buying pressure. The break above the broad sideways channel that dominated price action for several months strengthens the argument for a developing upward trendline.
If the bullish bias persists, a more defined bullish structure could emerge in the coming sessions.
The RSI remains above the neutral 50 level, indicating that bullish momentum continues to dominate the average price action over the past 14 sessions. As long as RSI holds above this threshold, buying pressure is likely to remain relevant.
The TRIX indicator also supports this outlook. The line remains above the zero level, signaling that bullish momentum is embedded within the exponential moving averages. This alignment across medium- and longer-term oscillators reinforces the prevailing bullish bias.
Key EUR/USD Levels to Watch
1.20419 – Key resistance: This level aligns with the recent high and represents the primary upside barrier. A sustained move toward or above this zone could reactivate stronger bullish momentum and confirm a more established upward trend.
1.18197 – Near-term barrier: This level marks the upper boundary of the broader sideways range. Sustained moves below it could shift focus back toward a short-term consolidation scenario.
1.17391 – Key support: This level aligns with the 50-period simple moving average and acts as the main downside barrier. A sustained break below this area could open the door to a more dominant bearish bias over the coming weeks.
Final Outlook
EUR/USD is approaching yearly highs with strong short-term momentum ahead of the NFP release. The direction of the pair will largely depend on upcoming U.S. employment data and evolving Federal Reserve expectations.
If the NFP report disappoints and strengthens expectations for further rate cuts, the U.S. dollar could remain under pressure, allowing the euro to extend its gains. However, key technical levels remain critical in determining whether the current bullish structure can develop into a sustained upward trend.
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