The EURUSD has risen with a boost from ECB President Lagarde’s comments suggesting a less dovish stance. A decrease in U.S. yields, with the 10-year yield falling below 4% for the first time since April 7, also contributed to this movement. Lagarde stated the disinflationary process has ended and trade uncertainty has lessened.<\/p>\n
Technically, the pair reclaimed the 100-hour moving average at 1.1722 after initial seller resistance. Momentum increased with Lagarde\u2019s statements and a drop in yields, favouring buyers. The current focus is on a resistance area between 1.1730 and 1.1742, which peaked at 1.17435.<\/p>\n
If the price breaks through this, attention may shift to the high point on Tuesday near 1.1779. Future targets include the July 24 peak at 1.1788 and the July 1 high at 1.18292, marking the highest since September 2021. Traders will monitor whether the pair maintains above the 1.1730-1.1742 zone, seeking confirmation of a bullish trend.<\/p>\n
We remember the market reacting to ECB President Lagarde\u2019s hawkish tilt last year, which caused a drop in U.S. yields and a push in the EURUSD. At that time, the pair broke key moving averages and tested resistance around 1.1742. This period of shifting central bank tone set the stage for the volatility we have seen since.<\/p>\n
Looking at today, the situation has evolved as the policy divergence between the ECB and the Federal Reserve becomes clearer. Eurozone core inflation has proven sticky, unexpectedly rising to 2.8% in the latest reading, causing the ECB to pause its rate-cutting cycle. This contrasts with the U.S., where the Fed is signaling a potential cut before year-end as recent GDP growth slowed to an annualized 1.4%.<\/p>\n
Given this backdrop, we should consider buying near-term EURUSD call options to capitalize on potential upside. A strike price around 1.1800 could be strategic, targeting the highs we saw in mid-2024. This offers a defined-risk way to profit if the ECB maintains its cautious stance and the pair breaks through recent resistance.<\/p>\n
However, uncertainty from upcoming central bank meetings means we should also prepare for sharp moves in either direction. Implied volatility for EURUSD options has already climbed to 8.5%, up from a low of 5.2% earlier this year. A long straddle, buying both a call and a put with the same strike price, would allow us to profit from a significant price swing, regardless of the direction.<\/p>\n
To hedge against a surprise reversal, we must also evaluate the downside risks. The latest U.S. non-farm payrolls report showed a surprising addition of 250,000 jobs, reminding us of underlying strength that could delay Fed cuts. Buying protective put options with a strike near 1.1650 would shield portfolios from a sudden drop if Fed speakers turn hawkish again.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EURUSD gains as Lagarde hints less dovish ECB; falling U.S. yields and key resistance eyed.<\/p>\n","protected":false},"author":62,"featured_media":17026,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-30616","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/30616","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=30616"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/30616\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17026"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=30616"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=30616"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=30616"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}