On Wednesday, February 18th, the euro struggled to hold ground against the US dollar below the 1.1850 level, trading near 1.1830 during the European session. Reflecting on Tuesday's movements, market sentiment experienced a rollercoaster ride. In the first half, a sharp decline in global risk appetite drove capital into the US dollar for safety, causing a significant pullback in the euro. However, as US equities stabilized and panic subsided, the dollar's upward momentum weakened, allowing the euro to recover its losses and ultimately close nearly flat for the day.

This extreme balance between bullish and bearish forces highlights the market's current state of indecision regarding direction. Although Federal Reserve Bank of Chicago President Austan Goolsbee delivered remarks suggesting "multiple rate cuts could be considered around 2026," this heavily conditional statement failed to ignite significant bullish enthusiasm in the market. The euro lacks a core driver for sustained upward movement, leaving it to fluctuate repeatedly within a narrow range.

Central Bank Governor's "Early Departure" Sparks Policy Speculation Just as the market was preoccupied with short-term volatility, a significant development broke the calm. Media reports revealed that European Central Bank President Christine Lagarde plans to step down before her term expires, ahead of the 2027 French election. As the key figure steering monetary policy for the eurozone, Lagarde's sudden announcement instantly sparked market speculation about her successor's policy leanings: Will the new president be a staunch 'hawk' or a moderate 'dove'? This uncertainty undoubtedly casts a new shadow over the already fragile euro. However, analysts at Danske Bank maintained a notably calm perspective. They pointed out that EU leadership has a strong track record of maintaining a balance between hawks and doves within the central bank. Furthermore, with frequent high-level personnel changes expected over the next two years, there is ample time to select a new president. Therefore, while this event introduces medium-term suspense, the risk of a sudden, drastic policy shift remains relatively contained. Investors need not panic excessively but should remain vigilant regarding potential sentiment disruptions.

Data Showdown: US Manufacturing as Today's Key Battleground US economic data released on Wednesday evening will be a critical variable determining short-term direction. The market is keenly awaiting the release of US December Durable Goods Orders and January Industrial Production figures, which serve as a microscope into the health of the US manufacturing sector. If the data proves robust, it will strongly support the Federal Reserve's stance of maintaining high interest rates, likely prompting a counteroffensive by the US dollar and further pressuring the euro. Conversely, if the data falls short of expectations, the foundation for dollar strength could weaken, potentially granting the euro a valuable breather. Additionally, the minutes from the Fed's January monetary policy meeting are also scheduled for release. Given that market expectations for no rate change in March are already as high as 92%, the minutes are likely to merely confirm the established situation and are unlikely to cause major waves. The real focus of the battle remains squarely on the temperature of the real economy's data.

Technical Warning: Bearish Structure Intact, Key Support Under Threat From a technical perspective, the short-term outlook for EUR/USD remains concerning. On the daily chart, the price has been on a downward trajectory since hitting a high of 1.2081, having breached the significant support level at 1.1900 and now hovering near 1.1830. The MACD indicator's histogram remains deep below the zero line, with the DIFF and DEA lines in a bearish crossover, clearly indicating that bearish momentum still dominates. Although the RSI indicator is slightly above the 50 mid-line, suggesting the market is not yet in extreme oversold territory, it also implies a lack of strong rebound impetus. Analysis suggests that if the euro cannot quickly reclaim the lost ground above 1.1900, the downside could extend further, with the level around 1.1765 becoming the last line of defense for the bulls. A breach of this level could trigger a deeper correction.