{"id":22781,"date":"2026-02-23T11:45:45","date_gmt":"2026-02-23T11:45:45","guid":{"rendered":"https:\/\/alchemymarkets.com\/?post_type=market_insights&#038;p=22781"},"modified":"2026-02-23T11:45:47","modified_gmt":"2026-02-23T11:45:47","slug":"dollar-softness-euro-resilience-and-sterling-at-a-crossroads","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/it\/education\/market-insights\/chart-of-the-day\/dollar-softness-euro-resilience-and-sterling-at-a-crossroads\/","title":{"rendered":"Dollar Softness, Euro Resilience, and Sterling at a Crossroads"},"content":{"rendered":"\n<p>This week\u2019s FX landscape is being shaped by trade policy shifts, fiscal concerns, geopolitical uncertainty, and key central bank communication. Rather than focusing on a single \u201cchart of the day,\u201d we\u2019re stepping back and highlighting the&nbsp;<strong>Charts of the Week<\/strong>\u2014the US dollar, the euro, and sterling\u2014through both macro and technical lenses.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>USD: Uncertainty Does Not Help the Dollar<\/strong><\/h2>\n\n\n\n<p>The US dollar has started the week on the softer side. While markets initially reacted positively to the absence of a US military strike on Iran over the weekend, broader uncertainty continues to weigh on sentiment.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Trade Policy Repricing<\/strong><\/h3>\n\n\n\n<p>The introduction of a&nbsp;<strong>15% Section 122 import surcharge<\/strong>&nbsp;has shifted the global trade landscape. Unlike the previous IEEPA regime with varying tariff levels, this flat surcharge changes the calculus for major trading partners:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>China and Brazil could see relatively lower tariff burdens.<\/li>\n\n\n\n<li>The UK and Australia lose the edge from previously negotiated 10% arrangements.<\/li>\n\n\n\n<li>The EU remains a central focus as trade terms are reassessed.<\/li>\n<\/ul>\n\n\n\n<p>US equity futures are down around 0.6\u20130.7% overnight, reflecting investor caution. While equities initially bounced, businesses face limited immediate relief from tariff pressures.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Fiscal Concerns and Treasury Risk<\/strong><\/h3>\n\n\n\n<p>One of the cleaner market reactions discussed last week was the potential for&nbsp;<strong>US Treasuries to weaken on fiscal concerns<\/strong>. With Asia holidays limiting overnight Treasury price action, FX markets may take direction from bond moves later today.<\/p>\n\n\n\n<p>There is a non-negligible risk of a synchronized sell-off in:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Treasuries<\/li>\n\n\n\n<li>Equities<\/li>\n\n\n\n<li>The dollar<\/li>\n<\/ul>\n\n\n\n<p>Should investors conclude that a core pillar of Washington\u2019s economic framework is weakening, dollar softness could accelerate.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Data and Event Risk<\/strong><\/h3>\n\n\n\n<p>After a soft 4Q25 US GDP print, the calendar this week includes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Consumer Confidence (Tuesday)<\/li>\n\n\n\n<li>PPI (Friday)<\/li>\n\n\n\n<li>President Trump\u2019s State of the Union<\/li>\n\n\n\n<li>Nvidia 4Q25 earnings<\/li>\n\n\n\n<li>Fed Governor Christopher Waller speech (2:00pm CET)<\/li>\n<\/ul>\n\n\n\n<p>Waller voted for a 25bp cut in January. If he reiterates a dovish, precautionary stance due to labor market risks, it reinforces dollar softness. However, any less-dovish tone could spark a short-covering bounce.<\/p>\n\n\n\n<p>For now, DXY appears biased lower within a&nbsp;<strong>97.00\u201398.00 range<\/strong>, though geopolitical risk around Iran may limit aggressive USD selling.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>EUR: Defensive Gains with Technical Structure in Focus<\/strong><\/h2>\n\n\n\n<p>The euro is quietly edging higher. Even though Friday\u2019s risk rally faded, EUR\/USD has shown resilience. The narrative appears to be shifting toward stabilization rather than deterioration in EU trade conditions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Macro Backdrop<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The EU may not receive a worse trade deal than currently priced.<\/li>\n\n\n\n<li>European exporters have largely adapted to existing tariff conditions.<\/li>\n\n\n\n<li>Eurozone business sentiment continues to improve.<\/li>\n\n\n\n<li>The German Ifo survey is expected to show a modest uptick in expectations.<\/li>\n<\/ul>\n\n\n\n<p>However, a strong upside surprise\u2014toward 91.5 in the expectations component\u2014would likely be required to drive a more decisive EUR breakout.<\/p>\n\n\n\n<p>If US assets soften further, capital may rotate into the euro as the most liquid alternative to the dollar.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>EUR\/USD \u2013 Technical Overview<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"744\" src=\"https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-77-1024x744.png\" alt=\"\" class=\"wp-image-22788\" srcset=\"https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-77-1024x744.png 1024w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-77-300x218.png 300w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-77-768x558.png 768w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-77-1536x1116.png 1536w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-77-2048x1488.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>From a technical perspective:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Price action has been contained within a\u00a0<a href=\"https:\/\/alchemymarkets.com\/education\/strategies\/falling-wedge-pattern\/\"><strong>descending wedge<\/strong>.<\/a><\/li>\n\n\n\n<li>The pair recently bounced from the lower boundary.<\/li>\n\n\n\n<li><a href=\"https:\/\/alchemymarkets.com\/education\/indicators\/relative-strength-index\/\">RSI<\/a> (14) sits near the mid-40s, suggesting neutral momentum with room to recover.<\/li>\n\n\n\n<li>Immediate <a href=\"https:\/\/alchemymarkets.com\/education\/guides\/support-and-resistance\/\">resistance<\/a> sits near\u00a0<strong>1.1850\u20131.1880<\/strong>.<\/li>\n\n\n\n<li>A move toward\u00a0<strong>1.1900<\/strong>\u00a0is possible, but a sustained break looks premature given geopolitical risks.<\/li>\n<\/ul>\n\n\n\n<p>The broader structure still shows lower highs, meaning bulls must clear 1.1900 convincingly to shift medium-term momentum.<\/p>\n\n\n\n<p>For now, EUR\/USD looks like it can grind higher\u2014but without strong acceleration.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>GBP: Sterling Faces Political and Policy Crosscurrents<\/strong><\/h2>\n\n\n\n<p>Sterling\u2019s outlook this week is shaped by both monetary and political developments.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>BoE Communication Risk<\/strong><\/h3>\n\n\n\n<p>Two key figures\u2014Governor Andrew Bailey and Megan Greene\u2014testify before the Treasury committee.<\/p>\n\n\n\n<p>Markets currently price roughly a 20bp move for March. Any signal that they are leaning toward a 25bp cut could:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Firm expectations of easing<\/li>\n\n\n\n<li>Apply fresh pressure to sterling<\/li>\n\n\n\n<li>Push EUR\/GBP higher<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Political Event Risk<\/strong><\/h3>\n\n\n\n<p>Thursday\u2019s UK by-election in Gorton and Denton adds another layer of uncertainty. A heavy defeat for the ruling Labour Party could:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reignite leadership speculation<\/li>\n\n\n\n<li>Increase political risk premium<\/li>\n\n\n\n<li>Weigh on GBP<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>EUR\/GBP \u2013 Technical Overview<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"744\" src=\"https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-76-1024x744.png\" alt=\"\" class=\"wp-image-22782\" srcset=\"https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-76-1024x744.png 1024w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-76-300x218.png 300w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-76-768x558.png 768w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-76-1536x1116.png 1536w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2026\/02\/image-76-2048x1488.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Technically, EUR\/GBP has been forming a\u00a0<strong>tight consolidation <a href=\"https:\/\/alchemymarkets.com\/education\/strategies\/symmetrical-triangle-pattern\/\">triangle<\/a><\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A narrowing wedge-like pattern has developed.<\/li>\n\n\n\n<li>Price recently broke lower from the upper boundary.<\/li>\n\n\n\n<li>RSI hovers near 43\u201344, indicating mild bearish momentum but not oversold.<\/li>\n<\/ul>\n\n\n\n<p>Key levels:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Resistance: 0.8750<\/li>\n\n\n\n<li>Support: 0.8720<\/li>\n\n\n\n<li>Broader target: 0.8800 if sterling weakens on event risk<\/li>\n<\/ul>\n\n\n\n<p>While the recent move shows some short-term EUR pullback, the macro backdrop suggests&nbsp;<strong>upside risk toward 0.88<\/strong>&nbsp;into week\u2019s end, especially if BoE commentary leans dovish or political risk intensifies.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Final Thoughts: Positioning for the Week Ahead<\/strong><\/h2>\n\n\n\n<p>This week\u2019s charts highlight a common theme\u2014<strong>uncertainty favors relative over absolute moves<\/strong>.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The\u00a0<strong>dollar<\/strong>\u00a0is vulnerable to fiscal and trade concerns but supported by geopolitical caution.<\/li>\n\n\n\n<li>The\u00a0<strong>euro<\/strong>\u00a0is benefiting defensively from improving sentiment and dollar softness.<\/li>\n\n\n\n<li>The\u00a0<strong>pound<\/strong>\u00a0faces a delicate balance between dovish BoE signals and political developments.<\/li>\n<\/ul>\n\n\n\n<p>Rather than explosive breakouts, markets appear set for tactical moves within defined ranges:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>DXY: 97\u201398<\/li>\n\n\n\n<li>EUR\/USD: 1.1850\u20131.1900 cap<\/li>\n\n\n\n<li>EUR\/GBP: bias toward 0.88<\/li>\n<\/ul>\n\n\n\n<p>In short, this isn\u2019t just a chart of the day. It\u2019s a week defined by crosscurrents\u2014where macro themes and technical structures are tightly intertwined.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dollar softness, euro resilience, and sterling uncertainty take center stage in this week\u2019s FX outlook as trade policy shifts, central bank signals, and political risks drive key technical levels.<\/p>\n","protected":false},"author":162,"featured_media":22794,"parent":0,"comment_status":"open","ping_status":"closed","template":"","market_insights_categories":[18],"class_list":["post-22781","market_insights","type-market_insights","status-publish","has-post-thumbnail","hentry","market_insights_categories-chart-of-the-day"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Dollar Softness, Euro Resilience, and Sterling at a Crossroads - Alchemy Markets<\/title>\n<meta name=\"description\" content=\"Charts of the Week: A breakdown of USD weakness, EUR defensive gains, and GBP event risk with technical analysis on EUR\/USD and EUR\/GBP levels to watch.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/alchemymarkets.com\/it\/education\/market-insights\/chart-of-the-day\/dollar-softness-euro-resilience-and-sterling-at-a-crossroads\/\" \/>\n<meta property=\"og:locale\" content=\"it_IT\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dollar Softness, Euro Resilience, and Sterling at a Crossroads - 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