The EURUSD recently dropped below the 100-hour moving average and the 61.8% retracement level due to stronger-than-expected Producer Price Index (PPI) data. This decline stopped when buyers provided support around the 200-hour moving average at 1.1635. After that, the pair bounced back to the 100-hour MA and 61.8% retracement at 1.16615, where sellers returned. Right now, the price is around 1.1649, indicating a tug-of-war between buyers and sellers at these technical levels.

Key Technical Levels To Watch

If the price falls below the 200-hour MA, it will likely attract attention to the 50% level of the drop from July’s high at 1.16098. On the other hand, if it rises above the 100-hour MA, traders may look at the resistance zone between 1.1698 and 1.1703 for potential opportunities. As of today, August 14, 2025, the EURUSD is caught between its 100-hour and 200-hour moving averages, suggesting indecision among traders. The price is around 1.1649, having found support near 1.1635. This narrow range indicates that the market is waiting for a new catalyst to spark a decisive move. The recent downward trend was driven by the US Producer Price Index for July 2025, which rose by 0.5% month-over-month, exceeding the 0.2% forecast. This increased the chance of a Federal Reserve interest rate hike at the September meeting to over 45%, up from 20% last week. This data strengthens the US dollar and limits potential gains for the pair. Additionally, recent data from Europe has been weak, especially the German industrial production numbers from last week, which fell by 0.8% unexpectedly. This growing gap between a surprisingly strong US economy and a slowing Eurozone offers a solid reason for the EURUSD to weaken further. Traders should see any rallies toward the 100-hour moving average at 1.16615 as potential selling opportunities.

Strategic Trading Opportunities

For derivative traders, a sustained break below the 200-hour moving average at 1.1635 should signal the start of bearish positions. Buying put options with a strike around 1.1600 would target the next major support level at 1.16098. The increasing likelihood of Federal Reserve actions favors this type of trade in the coming weeks. Conversely, if the pair defies the fundamentals and moves back above the 100-hour moving average, a short squeeze could occur. A rise above 1.16615 would indicate a pause in bearish momentum. In this case, purchasing short-term call options could be a smart move to capture a quick rally toward the 1.1700 resistance area. It’s important to remember the aggressive Fed rate hikes in 2022 and 2023 that drove the EURUSD significantly lower. While the current situation is less intense, it serves as a reminder of the strong impact a hawkish Fed can have on the US dollar. The current tech and fundamental landscape is starting to resemble the early phases of that previous trend. Create your live VT Markets account and start trading now.

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