The EURUSD pair recently reached its highest level since 2021, peaking at 1.1879 before retreating. Despite this, it maintained strong support around 1.1832, the July high, which enhances its importance. A fall below 1.1832 and 1.1788 could indicate a shift in momentum to the downside.
If the pair breaks below these support levels, the initial downside target would be 1.1808, followed by 1.1788, the high from 24 July. However, while the support holds, buyers are still in control. To continue its upward trajectory, the pair needs to break through 1.1909, which is a double swing high from July and September 2021.
Potential Bullish Signals
A clear move above 1.1909 would suggest a stronger bullish trend and open the possibility for further gains. Current technical analysis indicates these levels are key to understanding future movements of the EURUSD pair.
The successful defense of the 1.1829 level is a critical signal for us, confirming that buyers are willing to step in. This transforms the old 2025 high into a solid floor for now. Traders should view this level as the pivot point for any short-term bullish strategies.
This technical strength is supported by diverging central bank outlooks. Recent flash Eurozone CPI for August 2025 came in at 3.1%, above the expected 2.9%, putting pressure on the European Central Bank to maintain its restrictive stance. In contrast, the US Federal Reserve is seeing signs of a cooling labor market, giving them reason to pause.
The August 2025 Non-Farm Payrolls report, which we saw a couple of weeks ago, added only 150,000 jobs, missing forecasts and fueling bets that the Fed’s hiking cycle is over. This fundamental divergence gives the euro a clear advantage over the dollar. The dollar index (DXY) has subsequently fallen below the 102.00 level for the first time since May 2025.
Options Trading Strategies
For those with a bullish bias, buying call options with a strike price near 1.1900 for October 2025 expiry seems appropriate. This strategy targets a breakout above the key resistance at 1.1909. A bull call spread, such as buying the 1.1850 call and selling the 1.1950 call, could lower the entry cost while still profiting from a move higher.
On the other hand, we must manage the risk of a breakdown below the new support. Buying weekly put options with a strike around 1.1800 can serve as a cheap hedge for long positions. If the price breaks below 1.1829 with conviction, these puts would offer protection and could become a speculative play on a deeper correction toward 1.1788.
Looking at the options market, the 1-month implied volatility for EUR/USD has fallen to 6.5%, down from over 8% earlier in the summer. This relatively lower volatility makes selling premium an attractive strategy for those confident that support will hold. A bullish put spread, such as selling the 1.1800 put and buying the 1.1750 put, would allow traders to collect income.
We must remember the significance of the 1.1909 level from back in 2021, which capped the market during that year’s post-pandemic recovery phase. A decisive break above this historical resistance would signal a major long-term shift in momentum. This would likely attract a new wave of buyers and open the door to levels not seen in over four years.
