EUR/USD's Next Move: Hot inflation to 1.1785 or cooling jobs to 1.2000?

• EUR/USD is in a tight consolidation phase ahead of critical US macroeconomic data, marking its fourth consecutive day of subdued movement.
• The primary market focus is the US Consumer Price Index (CPI), with consensus forecasting a slight slowdown in January's headline and core inflation.
• The pair's direction depends on US data: hot CPI could push EUR/USD toward 1.1785, while signs of a cooling US labor market could see it retest 1.2000.

Most Read: Get ready for CPI – US Inflation Preview

EUR/USD entered a phase of tight consolidation this morning as traders adopted a "wait-and-see" posture ahead of critical macroeconomic data.

After hitting weekly highs near 1.1928, the pair drifted lower to trade around the 1.1850–1.1870 region, marking its fourth consecutive day of subdued movement.

A barrage of European data releases failed to inspire a breakout this morning. According to EuroStat, the number of employed persons in the Euro Area rose by 0.2% from the previous quarter to 176.13 million in the final quarter of 2025, ahead of the market expectations of a 0.1% increase, according to a preliminary estimate.

It was the bloc's 19th consecutive period of employment growth, extending the slow but consistent trend of increasing jobs in the European labor market, despite concerns that a stronger euro would reduce orders for major employers.

Despite this, EUR/USD continued to coil this morning. Will the US CPI data be enough to bring EUR/USD out of its funk and stoke some volatility?

One of the main reasons for Friday’s stagnation is the looming release of the U.S. Consumer Price Index (CPI). Investors are bracing for January inflation figures, which were delayed due to a brief partial US government shutdown earlier in the month. Consensus forecasts suggest:

• Headline Inflation: A slowdown to 2.5% YoY (from 2.7%).
• Core Inflation: A slight ease to 2.5% YoY (from 2.6%).

Beyond inflation, market sentiment was soured by renewed concerns over Artificial Intelligence (AI). Recent comments from industry leaders regarding AI’s potential to disrupt white-collar jobs within the next 18 months triggered a risk-off mood on Wall Street. This benefited the safe-haven US Dollar, exerting downward pressure on the Euro.

US CPI YoY

The path for EUR/USD will be dictated by two main factors:

Inflation Realities: If the U.S. CPI comes in "hotter" than expected, it will reinforce the Fed’s hawkish pause, likely pushing the pair toward the 1.1785 support level as rate-cut expectations for June are pushed back.

Once the inflation print is out of the way, markets will continue to focus on the US labour market.

Labor Market Strength: While January’s Nonfarm Payrolls were strong, rising jobless claims (reaching 227K this week) suggest underlying cracks. Any further signs of a cooling U.S. labor market could weaken the Dollar and allow the Euro to retest the 1.2000 psychological barrier.

From a technical perspective, EUR/USD is on a four-day losing streak after peaking just above the 1.1900 handle.

As long as bulls keep EUR/USD above the swing low at 1.1769, the momentum remains in favor of the bulls.

The period-14 RSI also remains above the 50 handle which hints at bullish momentum.

A break below this level may still struggle to gain traction as a host of key support areas rest below.

First will be the 1.1700 region with the 100-day MA resting just below at 1.1682. This region could prove a tough nut to crack especially given the narrative around the US dollar.

However, if risk sentiment remains fragile and we get a hot CPI print, then we could see a break of this key support zone and test the trendline.

EUR/USD Daily Chart, February 13, 2026

Safe Trades.

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