The EURUSD is experiencing upward momentum, surpassing the 50% retracement of the decline from the July 1 high at 1.16098. It has also moved past the top of a swing area up to 1.16309, reaching a session high of 1.1643. The next target is the 61.8% retracement at 1.1661, a zone that previously served as resistance from July 10 to 15.
For those looking to maintain the current trend, the 50% retracement at 1.16098 is a risk level that supports further upward movement. Those observing for a reversal would look for a drop below this point to indicate the possibility that the rally has halted. Currently, the upward trend has been in place for four days, starting when the price neared its 100-day moving average.
Testing Swing Areas
The price climbed above a swing area between 1.1518 and 1.15295, an area tested during yesterday’s session lows before rising again. Buyers are advancing, leveraging technical levels to maintain an upward trajectory.
We are seeing the EURUSD build on its recent gains after breaking the key 1.16098 level. For now, buyers are in control, targeting the next resistance zone around 1.1661. This area was a tough spot for the pair back in mid-July of this year.
This upward move is supported by recent fundamentals from the Eurozone. The flash inflation estimate for July 2025 came in at 2.4%, beating expectations and putting pressure on the European Central Bank to hold off on rate cuts. Traders are pricing in a more hawkish stance, which is fueling Euro strength.
On the other side of the pair, the US dollar is showing signs of weakness. Last Friday’s Non-Farm Payrolls report for July 2025 showed a gain of only 155,000 jobs, missing the consensus forecast significantly. This suggests the US labor market is cooling faster than the Federal Reserve anticipated.
Strategies and Patterns
Given this bullish outlook, traders could consider buying call options with strike prices above the current level, perhaps targeting the 1.1700 handle. The key support at 1.16098 makes selling put options an interesting strategy for those willing to take on more risk for premium income. This level would act as a line in the sand for such positions.
We saw a similar pattern of buyers stepping in after a dip back in late 2024, leading to a sustained rally. The bounce off the 100-day moving average just last week was a critical signal that the uptrend has resumed. For the coming weeks, holding above 1.16098 is the most important factor for maintaining this positive view.
