The Euro is holding steady near two-week highs, mainly because of the weakening US Dollar. US Treasury Secretary Bessent hinted at a possible 50 basis point rate cut by the Fed in September, affecting the dollar’s value. In the Eurozone, Q2 GDP showed a 0.1% growth for the quarter, while annual growth slowed from 1.5% to 1.4%. Employment rose slightly by 0.1%, but Industrial Production dropped more than expected, falling 1.3% in June.

Insights from US Economic Data

Today’s US PPI and Jobless Claims data are being closely examined for hints about potential Fed rate cuts. Predictions suggest that producer inflation will rise to 2.5% annually, with jobless claims anticipated to increase slightly to 228,000. The short-term outlook for EUR/USD faces resistance at a descending trendline around 1.1735. Support can be found around 1.1665, and there is more resistance at July’s highs. The dollar’s performance largely depends on the upcoming jobless and PPI statistics, which reflect the labor market and inflation trends. Currently, the Euro is testing a significant resistance level around 1.1735, driven mainly by speculation about a major Federal Reserve rate cut next month. This creates a tense situation as the Euro’s economic outlook is uncertain. The market is looking for clear signals, and today’s US data has added to the ambiguity. Earlier today, August 14, 2025, initial jobless claims were reported higher than expected at 235,000, indicating a cooling labor market and supporting the case for a Fed rate cut. In contrast, the Producer Price Index (PPI) exceeded forecasts at 2.7% year-over-year, suggesting persistent inflation, complicating the Fed’s decision-making process.

Strategies for Uncertain Markets

This mixed US data comes during a challenging time for the Eurozone. The weak 0.1% quarterly GDP growth and a 1.3% drop in industrial production highlight the manufacturing challenges the region has faced since the energy shocks of 2022-2023. Given this weakness, it’s hard to believe the Euro can maintain a significant rally on its own. In the coming weeks, we should consider strategies that capitalize on uncertainty and expected range-bound trading. An iron condor on EUR/USD options, with short strikes just outside the 1.1665 support and 1.1735 resistance levels, could be effective. This strategy will generate profits if the currency pair remains confined within these key technical levels until expiration. Alternatively, for those expecting a breakout, options can provide a limited-risk investment. If we believe that weak U.S. labor data will prompt the Fed to act and push EUR/USD higher, buying call options with a strike just above 1.1735 is a wise choice. The maximum loss would be limited to the premium paid for the option. In conclusion, all this price activity is setting the stage for the Federal Reserve’s meeting on September 17th. We anticipate that implied volatility will rise as that date approaches, making options more expensive. Therefore, taking positions now, while volatility is relatively low, may provide better value for traders. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now