EUR/USD, Oil Forecast: Two trades to watch

EUR/USD awaits EZ inflation & USD unchanged after the SOTU

The EUR/USD is holding steady ahead of eurozone inflation data and following Donald Trump's first State of the Union address of his second administration.

While speaking before Congress, President Trump touted his economic achievements and criticised the Supreme Court ruling against his tariff policies. He highlighted tariffs as the key driver behind the US's economic turnaround. The event was not market-moving, and the USD booked modest gains yesterday and is unchanged against its major peers today.

The improvement in risk sentiment could keep the USD under pressure. A deal between AMD and Meta helped US stocks rally overnight, along with improved consumer sentiment. There is no major US economic data today. However, Nvidia reports after the close and could impact broader market sentiment.

Meanwhile, the euro is also holding steady ahead of inflation data, which is expected to show that CPI cooled further in January to 1.7% YoY, down from 1.9% in December. On a monthly basis, CPI is expected to have fallen 0.5% MoM after gaining 0.2% previously. This is the second reading, so it isn’t usually as market-moving as the preliminary reading.

The data is not expected to impact the ECB's outlook, with no rate cut expected from the central bank this year.

EUR/USD forecast – technical analysis

After recovering from the 200 SMA, the EUR/USD rallied to a high of 1.2080 before easing lower to 1.18, where it currently trades. The price is finding support at the falling trendline support and 50 SMA around this level.

Should this support hold, buyers will look to rise above 1.1930, the February 10 high, to create a higher high and extend gains towards 1.20 and 1.2080, the 2026 high.

A break below the 50 SMA and falling trendline support brings the 1.17 round number into play ahead of the 200 SMA at 1.1660.

Oil hovers around a 7-month high with US-Iran in focus

Oil prices are hovering around 7-month highs on Wednesday, as the threat of military conflict between the US and Iran continues to add a risk premium on oil prices.

The US has built up a strong military force in the Middle East amid US-Iran negotiations. Take place to end the latter's nuclear and ballistic missile programme.

OPEC is the third-largest producer, accounting for around 3% of global oil supply.

U.S. President Trump briefly laid out his case for a possible attack on Iran in his State of the Union speech in Congress, saying he would not allow the world's largest sponsor of terrorism to have a nuclear weapon.

These comments added to market uncertainty as the third round of talks kicks off this week. Trump has warned Iran that there will be very bad consequences if Iran does not agree within the coming weeks.

While geopolitical tensions continue to support the price, the market is also contending with large inventory gains, as supply exceeds demand.

According to the API, oil stockpiles rose by 11.43 million barrels in the week ending February 20

Oil forecast – technical analysis

Oil extended its recovery from the 55.75 2026 low, rising above the 200 SMA to a 7-month peak of 67.30. The price has eased off slightly to 66.00, but remains above its rising trendline with the RSI also supporting further upside.

Buyers will look to rise above 66.50 to create a higher high towards 70.00.

Immediate support is at 65.00. A break below here opens the door towards 62.50, the 200 SMA. Below here, sellers could gain traction towards 60.00.