The EURUSD pair recently hit its highest level since 2021, reaching 1.1879 before pulling back. Still, it found solid support around 1.1832, the high from July, making this level significant. If it drops below 1.1832 and 1.1788, we may see a shift in momentum to the downside. Should the price break under these support levels, the first downside target is 1.1808, followed by 1.1788, from July 24. However, as long as the support holds, buyers remain in charge. To keep rising, the pair needs to surpass 1.1909, which represents double swing highs from July and September 2021.

Potential Bullish Signals

A clear move above 1.1909 would indicate a stronger bullish trend and open the door for further gains. Current technical analysis shows that these levels are crucial for predicting the future movements of the EURUSD pair. Successfully defending the 1.1829 level is a key signal for us, proving that buyers are ready to step in. This makes the old 2025 high a strong floor for the time being. Traders should see this level as the pivot for any short-term bullish strategies. This technical strength is backed by diverging central bank outlooks. The recent flash Eurozone CPI for August 2025 was 3.1%, above the expected 2.9%, putting pressure on the European Central Bank to stay restrictive. Meanwhile, the US Federal Reserve is noticing signs of a cooling labor market, which may lead them to pause. The Non-Farm Payrolls report from August 2025 showed only 150,000 jobs were added, below forecasts. This fuels speculation that the Fed’s rate hikes may be over. This fundamental difference gives the euro an edge over the dollar. The dollar index (DXY) has dropped below 102.00 for the first time since May 2025.

Options Trading Strategies

For those who are bullish, buying call options with a strike price close to 1.1900 for the October 2025 expiry looks like a smart move. This strategy aims for a breakout above the important resistance at 1.1909. A bull call spread—buying the 1.1850 call and selling the 1.1950 call—could cut initial costs while still allowing for profit if the price moves up. Conversely, we should manage the risk of falling below new support levels. Buying weekly put options with a strike around 1.1800 can serve as a low-cost hedge for long positions. If the price breaks below 1.1829 convincingly, these puts would provide protection and could turn into a speculative play for a further drop towards 1.1788. In the options market, the 1-month implied volatility for EUR/USD has decreased to 6.5%, down from over 8% earlier this summer. This lower volatility makes selling premium an attractive approach for those confident that support will hold. A bullish put spread—selling the 1.1800 put and buying the 1.1750 put—would let traders earn income. We should also note the significance of the 1.1909 level from 2021, which limited market growth during that year’s post-pandemic recovery. A decisive break above this historical resistance would suggest a major long-term momentum shift, likely attracting new buyers and paving the way for levels not seen in over four years. Create your live VT Markets account and start trading now.

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