Elliott Wave Update of EURUSD – February 18th, 2026

Why It Matters

PCE inflation is the Federal Reserve's preferred gauge, so its outcome can shift USD strength and directly impact EUR/USD pricing. Understanding the emerging wave pattern helps traders position for potential volatility.

Key Takeaways

• EURUSD slipped modestly ahead of PCE data
• Hourly chart shows emerging corrective wave pattern
• PCE inflation will likely drive volatility
• Traders watch wave counts for directional bias
• Potential support near 1.0800, resistance at 1.0900

Pulse Analysis

The U.S. Personal Consumption Expenditures (PCE) price index remains the Fed's benchmark for inflation, making Friday's release a market catalyst. A higher‑than‑expected reading typically bolsters the dollar, pressuring the euro lower, while a softer figure can revive risk appetite and lift EUR/USD. Investors are therefore calibrating exposure ahead of the data, with many using technical cues to gauge short‑term sentiment.

Within the Elliott Wave framework, the hourly EUR/USD chart is transitioning from an impulsive wave into a corrective phase, likely a three‑wave (ABC) structure. This suggests that the recent downtrend may pause, allowing the pair to consolidate before the next directional move. Wave analysts point to a potential retracement toward the 1.0800 level, which aligns with prior swing lows and key Fibonacci zones, while the 1.0900 area serves as immediate resistance.

For traders, the convergence of macro data and wave analysis creates a nuanced risk‑reward landscape. Positioning near the identified support can offer a tactical entry if the PCE data supports a weaker dollar, whereas a break above 1.0900 could signal a resumption of the bullish impulse. Incorporating stop‑losses around the wave‑derived levels and monitoring real‑time inflation headlines will be essential for managing volatility in the coming days.