Prior -1.8That marks a third straight month of improving sentiment in the euro area, with some good news in the opening two months of 2026 at least. This is the first positive reading since July last year, reaffirming some added optimism as we get into the new year. Of note, the expectations index also rose to 15.8 – up from 10.0 in the previous month.Looking at the details further, Germany continues to show a marked improvement in sentiment. The index for the German economy rose to -6.9, its highest since July last year. That’s encouraging with Sentix noting that “this could mean the end of the recessionary phase of the German economy”.And overall for the region, “an upturn seems to have begun”. We’ll see but the nascent signs of the resilient recovery is looking decent.
This article was written by Justin Low at investinglive.com.
💡 DMK Insight
So, euro area sentiment just turned positive for the first time since July last year, and here’s why that matters: improving sentiment can lead to increased consumer spending and investment, which are crucial for economic recovery. This uptick might influence the ECB’s monetary policy decisions, especially if it continues in the coming months. Traders should keep an eye on how this sentiment shift impacts the euro against major currencies like the USD, especially if it leads to a stronger euro. But don’t get too carried away—this is just one data point. The broader economic context still includes inflation concerns and geopolitical tensions that could dampen this optimism. If sentiment continues to rise, watch for potential resistance levels around recent highs in EUR/USD, which could signal a stronger bullish trend. For now, monitor the upcoming economic indicators and ECB statements closely; they could provide further clarity on whether this sentiment shift is sustainable or just a temporary blip.
📮 Takeaway
Watch for continued positive sentiment in the euro area; if it holds, EUR/USD could test recent highs, impacting trading strategies.






