The EURUSD saw a slight rise compared to last Friday’s closing price. The pair climbed initially but then lost some gains, dropping into an important support zone between 1.16920 and 1.17028 before bouncing back. In early trading today, the low held at this support level, leading to an upward movement. During the European morning session, the pair approached a significant resistance area, defined by swing highs from August, between 1.1730 and 1.17419. Sellers stepped in at the upper part of this zone, stopping the rise at a session high of 1.17421. The current trading position is around 1.17336 within this zone.

Potential Breakout Scenario

If the price breaks above 1.17419, it could retest Friday’s high at 1.17587. Traders could aim for higher targets, like July’s peak at 1.1769, 1.17874, and the yearly high of 1.18289 from July 1. If sellers manage to defend the July highs, attention may shift back to the support area between 1.1692 and 1.17028. A drop below this zone could weaken the short-term outlook and bring focus to the 100- and 200-hour moving averages near 1.16698. Falling below this level might signal a deeper correction and add downward pressure. As of today, September 8, 2025, the EURUSD is testing an essential pivot point, currently holding above the key support level of 1.1692. This price movement follows a mixed U.S. jobs report last week, which revealed a solid increase of 195,000 jobs but a disappointing 0.2% rise in average hourly earnings. This situation has created uncertainty in the market, balancing a strong labor market against low inflation pressures. For traders expecting a bullish breakout above 1.17419, buying short-dated call options with strike prices around 1.1750 or 1.1775 could be a smart move. This outlook is bolstered by the latest Eurostat data showing Eurozone inflation for August at 2.8%, slightly above expectations, increasing pressure on the European Central Bank to take a hawkish stance. The ultimate target for this scenario is the yearly high near 1.18289 from July 2025.

Neutral Strategy Consideration

On the other hand, if the resistance around 1.1742 remains strong, we might see a drop toward the 1.1700 level. In this case, buying put options with a strike price just below 1.1700 would take advantage of a break of the 1.1692 support zone, predicting a drop toward the moving averages clustered around 1.1670. Given the well-defined range of about 1.1690 to 1.1760, a neutral options strategy could also be beneficial in the upcoming weeks. For example, selling an iron condor with short strikes outside this expected range could generate profit from time decay. This strategy assumes the pair will remain caught between the strong signals of a resilient U.S. economy and possibly rising inflation in Europe. It’s important to keep a close eye on implied volatility, which has been increasing ahead of next week’s ECB policy meeting. Remember the significant market reactions to central bank surprises in 2023 and 2024, highlighting the need for using defined-risk option spreads. These events can cause considerable price changes, making risk management crucial for any position. Create your live VT Markets account and start trading now.

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