#TradFi交易分享挑战

If the interest rate differential determines the medium-term direction of EURUSD, then changes in geopolitics and trade patterns may become the “catfish” that breaks the currency stalemate. 2026 is a big year in the global political cycle: many European countries are entering election season, and across the Atlantic the atmosphere around the U.S. midterm elections is also heating up, so the disruption to exchange rates from political factors cannot be ignored.

Within the European Union, it is facing an unprecedented test of unity. The sharing of the costs of the energy transition, serious differences in immigration policy, and the game between France and Germany over the path toward fiscal integration are all, at different levels, undermining the stability risk premium of the euro. Recently, Italy’s sovereign credit rating was added to a negative watch list, which once again brought market memories of European sovereign debt risk back to the forefront. The shadow of the eurozone sovereign debt crisis from ten years ago has not fully faded; once a member state’s fiscal discipline slips out of control, the euro could be indiscriminately sold off at any time. This is the biggest risk below EURUSD.

But at the same time, changes in the trade arena are also providing potential support for the euro. In recent years, undercurrents of a global “de-dollarization” wave have been building up, and several emerging market central banks have begun increasing their euro holdings as part of reserve diversification. More importantly, there are signs of easing and upgrading in trade relations between the euro area and China: the two sides have reached a phased framework agreement on electric vehicle tariff issues, and German car exports are expected to regain momentum. If the trade surplus expands again, current account inflows will provide solid fundamental buying support for the euro. In addition, the sharp drop in energy prices has significantly improved trade conditions in the euro area: the huge trade deficit during the 2022 energy crisis has turned into a surplus, which effectively shuts the door, at the root, to room for a sharp depreciation of the euro.

From the perspective of capital flows in the FX market, after large asset management institutions have spent as long as two years underweighting European assets, signs of a rebound are beginning to appear. Global equity market flow data shows that European equity funds have received net inflows for three consecutive weeks, which is typically positively correlated with the EUR exchange rate. These long-term allocation funds are less sensitive to short-term interest-rate differential fluctuations, and instead place more emphasis on valuation and fundamental repair; their entry is expected to help build a more solid bottom for EURUSD.

On the technical side, the support strength of EURUSD at 1.07 has been tested multiple times, and the market has accumulated a large number of limit buy orders in this area. From a midline perspective, as long as the exchange rate can hold above 1.07, the probability of building up and moving upward is greater than breaking down to the downside. If this can be matched with positive political developments—such as a stable governing coalition after Germany’s election dust settles, or a breakthrough in euro-area fiscal integration—then the euro could very well emerge from a rebound cycle that catches the market off guard. How much do you think political factors will affect the euro? Looking forward to your in-depth analysis.
$EURUSD ‌