Euro Tries to Hold Gains Ahead of ECB Decision

Key Moments

Stabilization Efforts in EURUSD

The euro is trying to hold steady against the U.S. dollar after last week’s sharp rise. However, the move lost momentum and prices pulled back. According to Scotiabank’s Shaun Osborne and Eric Theoret, EURUSD has entered a consolidation phase. Traders are now positioning ahead of key economic events.

The euro is unlikely to influence ECB thinking for now. Even around 1.20 in EUR/USD, moves are too small to materially affect inflation or alter central bank forecasts. pic.twitter.com/ZIh07F3wiI

— LiveSquawk (@LiveSquawk) February 2, 2026

Focus on ECB and Inflation Data

This week, attention is shifting back to core fundamentals. In particular, markets are focused on preliminary CPI data due Wednesday. At the same time, traders are preparing for the ECB policy decision on Thursday.

The European Central Bank is widely expected to leave policy unchanged. According to Osborne and Theoret, markets anticipate a hold. In addition, ECB President Christine Lagarde is likely to stress two-sided risks to growth and inflation. As a result, the overall message should remain neutral. Yield spreads have also started to recover, offering modest support to the euro.

Key EURUSD Levels Highlighted by Scotiabank

From a technical perspective, Scotiabank points to clear levels on both sides. The analysts see solid support near 1.18. Moreover, they note little meaningful resistance before the 1.20 level.

Looking ahead, inflation data, ECB messaging, and yield movements will shape euro trading this week. As these factors unfold, short-term direction should become clearer.