The EURUSD currency pair has seen significant ups and downs. In early U.S. trading, it dipped below the range of 1.1581 to 1.15885 but quickly bounced back. This typical summer trading behavior led to a price reversal. The recovery went beyond the halfway point of July’s range, peaking at 1.16098. After that, it approached the 100-hour moving average at 1.16415, where sellers stepped in, causing the price to drop. The 100-hour moving average is now a resistance level; if the price exceeds this, attention will shift to the 200-hour moving average at 1.16531.

Current Trading Dynamics

If the price drops below the 50% midpoint at 1.16098, it could encourage sellers and push the EURUSD back toward earlier lows. Currently, the currency shows erratic and uncertain trading patterns typical of late summer. It’s important to stay flexible and alert to market changes during this time. The EURUSD struggles with its 100-hour moving average around 1.1641, reflecting the market’s indecisiveness. Sharp price reversals are common in late August as trading volume decreases before September. Traders should expect this choppy action to continue soon. This price movement occurs amid mixed economic signals. The latest U.S. jobs report from early August 2025 showed a solid but not outstanding gain of 190,000 jobs, allowing the Federal Reserve to pause its tightening cycle. Meanwhile, Eurozone core inflation for July 2025 remained stubbornly high at 3.1%, putting the European Central Bank in a tough spot.

Central Bank Divergence

The difference between central banks is keeping the currency pair tightly bound between key technical levels. For derivative traders, selling volatility might be a suitable short-term strategy. We see traders using iron condors, betting that the pair will stay between roughly 1.1550 and 1.1700 over the next week or two. However, this tight trading range often signals an upcoming breakout. One-month implied volatility for EURUSD is around 8.5%, which is high but not extreme, making long volatility positions appealing. We think buying straddles or strangles might be profitable, as it allows traders to benefit from a significant move after holiday trading ends and institutional volume returns. Reflecting on similar market conditions, we remember the low-volume summer trading of 2023, which also showed long periods of range-bound activity before a price shift in the fall. For now, we will use the 50% level at 1.16098 as our key pivot point. If the price breaks below this level, we may consider adding bearish positions. Alternatively, a strong move above the 200-hour moving average at 1.16531 would indicate that bulls are gaining control. Create your live VT Markets account and start trading now.

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