EURUSD nears its 200-hour moving average while testing the important swing range of 1.1663-1.1691
by VT Markets
/
Jul 18, 2025
The EUR/USD pair has reached the 200-hour moving average at 1.1667. It is also at the lower boundary of a swing area that runs from 1.1663 to 1.1691.
This swing area was important as support from late June to July and was a key level from April to November in 2021.
Key Inflection Point
We are at a crucial inflection point for the pair, where current support coincides with significant historical price activity. How the market behaves in this area is crucial. If the level fails to hold, it could signal a continuation of the larger downtrend. A strong rebound might indicate the formation of a near-term bottom.
The fundamentals currently favor a stronger dollar, which poses challenges for this pair. Recent data pointed to Eurozone inflation hitting a record 9.1% in August. However, the European Central Bank is cautious due to recession worries, as noted by Lagarde. In contrast, the latest US jobs report revealed 315,000 new jobs added, giving Powell the ability to push for aggressive rate hikes.
Given this difference, we suggest traders consider buying put options to prepare for a drop below 1.1663. This strategy allows for a defined risk while potentially profiting from a decline, especially since this same level failed as support in late 2021, leading to a sharp fall. A break here could push the pair down toward the lows of around 1.1200 from that period.
Positioning Through Volatility Strategies
For those expecting a significant price change but unsure of its direction, long volatility strategies like straddles are advisable. With important inflation and growth data coming from both regions, we anticipate increased price movement. This approach enables traders to benefit from any breakout, whether the news turns out to be unexpectedly positive or negative for the euro.
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by VT Markets
Jul 18, 2025
Insights 
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