The Rising Momentum of EURUSD The EURUSD has climbed higher, reaching a new session peak and going beyond the July 1 high of 1.18289 for this year. This rise marks its highest point since September 2021, indicating strong upward momentum. On the daily chart, this breakthrough opens the door to a major resistance zone around 1.1909. This zone includes previous highs, particularly 1.1909 from September 3, 2021, and 1.19087 from July 30, 2021. Since these levels are close together, traders are likely to watch this area for future price trends. If this upward trend continues, a clear break above 1.1909 could target further retracement levels, keeping the positive trend as the pair moved through previous resistances this month. On the other hand, support is forming at the 1.18289 breakout level, where buyers are expected to step in during potential price drops. Additional support can be found at 1.1788, the high from July 24. Opportunities in Options With strong upward momentum pushing us past the July 2025 peak, we see a chance to buy call options. A move toward the next key resistance level around 1.1909 looks increasingly likely in the upcoming weeks. This level is important because it’s close to the highs from summer 2021. This strong technical position is backed by good economic news, as the latest German ZEW Economic Sentiment for September came in higher than expected at 15.2. Additionally, recent comments from the ECB indicate a growing inclination to tighten monetary policy to fight inflation, currently at 2.8% in the Eurozone. This differing approach from the Federal Reserve is boosting the Euro’s value. For those with a more cautious strategy, selling out-of-the-money put options with a strike price near the new support level of 1.18289 could be wise. This method allows traders to earn premiums while betting that the old resistance will hold during any potential price dips. Implied volatility has increased slightly with this breakout, making these premiums more appealing. The US Dollar Outlook We’re also keeping an eye on the dollar. Last month’s US jobs report was weaker than expected, with only 150,000 jobs added. This, along with a more cautious tone in last week’s Federal Reserve minutes, suggests that the dollar may keep weakening against the euro. The difference in policies between the central banks is becoming a key market driver. Create your live VT Markets account and start trading now.

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