The Euro’s Resistance Level The Euro (EUR) might keep rising, but it must break the 1.1720 resistance level to move toward 1.1760. Analysts from UOB Group say that even though the momentum is positive, a strong close above 1.1720 is crucial for ongoing progress. Recently, the EUR hit a high of 1.1694 and closed at 1.1687, showing more strength than expected. This upward trend hints at possible gains, but we need to confirm that it can break through 1.1720. Staying above 1.1650, with minor support at 1.1675, is key for maintaining momentum. In the upcoming weeks, the EUR’s weakness has stabilized. It is expected to trade between 1.1575 and 1.1720. The quick move toward 1.1720 was noted when the EUR reached 1.1694, closing higher for three days in a row. The chance of going beyond 1.1720 remains as long as the EUR stays above strong support at 1.1625. With positive momentum building, traders might consider strategies that benefit from a rise in the EUR/USD. Buying call options with a strike price at or slightly above the current level could be effective for capitalizing on a potential breakout. This strategy limits risk to the premium paid for the option. ECB’s Influence and Inflation This optimistic view aligns with recent comments from European Central Bank officials, who suggest that interest rates will stay high for a while to bring inflation back on track. This stance has created a solid foundation for the Euro, despite a recent dip in headline inflation to 2.9% in September. The market sees the bank’s determination as a source of strength for the currency. For a more organized strategy, we recommend a bull call spread. This involves buying a call option with a 1.1700 strike and selling a call option with a 1.1760 strike at the same time. This method reduces initial costs while targeting the specific range we expect in the coming weeks. It works well if prices rise gradually but remain capped. On the other hand, we are closely monitoring US Treasury yields, which have recently risen to near 4.8%, similar to a spike seen in late 2023. If these yields start to peak, it could weaken the US dollar’s support. A dip in yields might help the EUR/USD break through the 1.1720 resistance. The 1.1625 level is crucial for managing risk in this bullish outlook. If it drops below this strong support, it would indicate that the upward momentum is fading, contradicting the current view. In that case, traders should think about closing bullish positions or taking protective put options to shield against further declines. Create your live VT Markets account and start trading now.

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