Market Analysis Summary - U.S. Dollar and Major Currency Pairs

Date: February 18, 2026

Author: Vladimir Zernov

Key Highlights

• The U.S. Dollar is testing weekly highs as traders prepare for the release of the FOMC Minutes.
• Economic reports indicate a mixed outlook, with housing starts and building permits exceeding expectations, while durable goods orders fell short.
• EUR/USD is pulling back towards the 1.1800 level, while GBP/USD is declining due to UK inflation data.
• USD/JPY is rallying amid rising Treasury yields, and USD/CAD is gaining ground despite a rally in commodity markets.

U.S. Dollar Performance

The U.S. Dollar Index (DXY) has gained traction, moving above previous resistance levels. Key economic indicators include:

• Housing Starts: +6.2% month-over-month in December (forecast: -4.4%)
• Building Permits: +4.3% in December (forecast: -0.2%)
• Durable Goods Orders: -1.4% month-over-month (forecast: -0.2%)
• Industrial Production: +0.7% month-over-month in January (forecast: +0.4%)

These reports have provided support for the U.S. Dollar, with expectations that the FOMC Minutes may reveal a hawkish stance from Fed Chair Powell.

EUR/USD Analysis

EUR/USD is under pressure, currently testing the 1.1800 support level. The Eurozone's inflation has stabilized, and there are no significant catalysts expected from the ECB. If EUR/USD settles below 1.1800, it may target the next support at 1.1770 - 1.1785.

GBP/USD Insights

GBP/USD has retreated as UK inflation data showed a decline from 3.4% to 3.0%, aligning with analyst expectations. The job market's weakness may prompt the Bank of England to consider rate cuts, which is bearish for the pound. The nearest support level is at 1.3485 - 1.3500.

USD/CAD and Commodity Markets

Despite a strong rally in oil prices, USD/CAD is moving higher, attempting to settle above the 1.3650 - 1.3665 resistance level. This trend suggests a bearish outlook for the Canadian dollar, as commodity-related currencies are under pressure.

USD/JPY Developments

USD/JPY is rising, influenced by increasing Treasury yields and positive export data from Japan. The pair is testing resistance at 154.50 - 155.00, with potential to move towards 158.00 - 158.50 if it breaks through this level.

Conclusion

The U.S. Dollar is showing strength ahead of the FOMC Minutes, with various economic indicators providing mixed signals. Major currency pairs like EUR/USD, GBP/USD, and USD/JPY are reacting to both domestic economic data and broader geopolitical concerns.