The EURUSD saw a dip during the early U.S. session, briefly dropping below the support level of 1.1698–1.1703. The decline reached 1.1692 before the currency pair rebounded above 1.1703, climbing to a session high of 1.1723.
Despite this recovery, momentum has weakened, and the price has started to move lower again. The range of 1.1698–1.1703 remains an important short-term level, with support at this zone indicating upward potential. A continuous drop below this level could diminish its appeal for buyers.
Analysis And Updates
For further updates and analyses, visit investingLive.com.
We are watching the 1.1698 to 1.1703 area closely as it represents a key battleground for the EURUSD. The pair’s quick dip to 1.1692 and subsequent rebound shows that buyers are still present, but their strength is questionable. For now, holding above this zone keeps the immediate bullish outlook in play.
This pressure comes as no surprise given recent data. The U.S. July inflation report last week came in hotter than expected at 3.1%, and the Non-Farm Payrolls earlier in August showed a robust addition of 210,000 jobs. This data supports a stronger dollar, making it harder for the EURUSD to rally from this support level.
Meanwhile, economic signals from the Eurozone have been soft, with July’s flash inflation estimate coming in below forecasts at 2.4%. Concerns over sluggish German industrial output are also weighing on the euro. This policy divergence between a firm Federal Reserve and a more cautious European Central Bank is putting fundamental weight on the 1.1700 support.
Trading Strategies
For derivative traders who believe this support will hold, buying short-term call options is a direct strategy. A trader might consider purchasing September calls with a strike price around 1.1750 to capture a potential bounce. This approach offers a defined risk, limited to the premium paid for the option.
Conversely, if we see a sustained move below 1.1698, the bullish case weakens considerably. Traders anticipating this breakdown could buy put options with a strike price near 1.1650. This would profit from a slide towards lower levels we haven’t seen since the spring of this year.
Looking back, the 1.1700 level has historical significance, acting as both major support and resistance during the 2020-2021 period. As the pair consolidates here, implied volatility on options may temporarily decrease. This could present an opportunity to purchase options at a cheaper price ahead of a potential breakout.
