EUR/USD price extends February gains as German election results boost upside
EUR/USD rises to February high as German election boosts investor confidence.
EUR/USD price continues its strong uptrend in February, with bullish momentum carrying the pair closer to critical resistance levels.
After finding support at 1.0460 in the Asian session on Monday, the pair surged 0.6% to hit a new February high of 1.0528, just below last month’s peak at 1.0530. The euro’s strength follows political developments in Germany and speculation around the European Central Bank’s (ECB) next policy move.
The conservatives' victory in the German election provided a fresh tailwind for EUR/USD. This political stability has contributed to investor confidence, though markets remain focused on the ECB’s stance on interest rates.
Regarding the ECB next policy move, a policymaker Pierre Wunsch suggested in a recent Financial Times interview that rate cuts are not guaranteed in April, indicating the central bank’s willingness to keep rates elevated if inflation data does not justify easing. While inflation risks appear limited, Wunsch highlighted that the ECB’s task is to fine-tune policy for a soft landing rather than rush to rate cuts.
EUR/USD price dynamics (Jan 2025 - Feb 2025). Source: TradingView.
EUR/USD price outlook: Bullish momentum faces 100-day EMA at 1.0530
Currently, EUR/USD is trading around 1.0512 in the European session, within striking distance of the 100-day EMA near 1.0530. For EUR/USD bulls, the immediate focus remains on the 1.0530 level and the moving average serves as a key resistance level. A decisive break above it could encourage further bullish momentum. However, failure to breach this threshold may lead to a period of consolidation, with the 1.0460 support level acting as a key floor for price stability.
The RSI on both the daily and 4-hour charts remains in bullish territory, reinforcing the case for continued upward movement. Traders will be watching ECB signals and broader market sentiment as February draws to a close whether buyers can push beyond the 100-day EMA or if the pair retreats toward support.
The latest FOMC meeting minutes kept the U.S. Dollar relatively firm, limiting EUR/USD recovery. The fiber found support at 1.04, where the 100-day EMA provided a temporary floor.
