The EURUSD has been rising and has now reached an important range between 1.1692 and 1.17028. In this zone, prices have faced some resistance, causing a small drop. This range is crucial for both buyers and sellers as it clearly indicates risk and possible market direction. Sellers can use this area to enter trades with stop-loss orders set above it.

Importance of the Swing Area

Buyers, on the other hand, need to push prices above this area and hold to continue the upward trend. The video included analyzes the technical factors behind this move and explains why this swing area is essential for the Euro’s future direction. We are closely watching the EURUSD as it approaches the key 1.1700 level, which acts as a significant resistance point. This upward movement follows last week’s unexpected rise in Eurozone inflation to 2.8%, while the U.S. core PCE was slightly below expectations at 3.0%. The market is now anticipating a more aggressive European Central Bank (ECB) compared to a more patient Federal Reserve, creating tension. For traders who expect a reversal at this level, buying put options with a strike price of around 1.1650 limits their risk. This approach aligns with resisting at the resistance level, as the maximum loss is just the premium paid. Historical data shows considerable selling pressure in the 1.16-1.17 range during the second half of 2021, indicating that history could repeat itself.

Trader Strategies Around 1.17000 Resistance

On the flip side, those who believe in a breakout above 1.17028 might want to consider call options to take advantage of potential gains toward the psychological 1.1800 level. A strong daily close above this zone would confirm that buyers have absorbed the existing supply. A call spread could also mitigate the initial cost of betting on this bullish outlook. With the central bank announcements coming up next week, we are in a tight “decision area,” which may increase implied volatility. Traders who have no clear direction but expect significant movement can use a long straddle strategy, buying both a call and a put option at the current price. This strategy profits from a major breakout in either direction, which seems likely given the mixed economic signals. Create your live VT Markets account and start trading now.

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