The EURUSD recently fell below the 100-hour moving average and the 61.8% retracement level due to unexpectedly strong PPI data. The decline halted when buyers provided support near the 200-hour moving average at 1.1635.
The pair then rebounded to the 100-hour MA and 61.8% retracement at 1.16615, where sellers reappeared. Currently, the price hovers around 1.1649, showing a struggle between buyers and sellers over these technical levels.
Key Technical Levels To Watch
Should the price fall below the 200-hour MA, attention would turn to the 50% midpoint of the decline from July’s high at 1.16098. Conversely, a rise above the 100-hour MA would lead traders to consider the resistance zone between 1.1698 and 1.1703 for another examination.
As of today, August 14, 2025, we see the EURUSD caught between its 100-hour and 200-hour moving averages, signaling a period of indecision for traders. The price is battling around the 1.1649 mark after finding support near 1.1635. This tight range suggests the market is waiting for a fresh catalyst before making a decisive move.
The recent downward pressure was fueled by the US Producer Price Index for July 2025, which came in stronger than expected at a 0.5% month-over-month increase, beating forecasts of 0.2%. Consequently, the probability of a Federal Reserve interest rate hike at the September meeting has now jumped to over 45%, up from just 20% last week. This data strengthens the dollar and puts a ceiling on the pair’s potential gains.
Adding to the bearish sentiment, recent data from Europe has been soft, particularly last week’s German industrial production numbers, which unexpectedly fell by 0.8%. This growing divergence between a surprisingly robust US economy and a slowing Eurozone provides a strong fundamental reason for EURUSD to weaken further. Traders should view any rallies toward the 100-hour moving average at 1.16615 as potential selling opportunities.
Strategic Trading Opportunities
For derivative traders, a sustained break below the 200-hour moving average at 1.1635 should be seen as a key trigger to initiate bearish positions. We would consider buying put options with a strike around 1.1600 to target the next major support level at 1.16098. The increasing likelihood of Fed action provides a strong tailwind for this type of trade over the next few weeks.
Conversely, should the pair defy the fundamental backdrop and reclaim the 100-hour moving average, a short squeeze could materialize. A move above 1.16615 would signal that the bearish momentum has failed for now. In that event, purchasing short-term call options could be a tactical play to capture a quick rally toward the 1.1700 resistance area.
We should recall the aggressive Fed hiking cycle back in 2022 and 2023, which drove the EURUSD significantly lower and broke parity. While the current situation is less extreme, it serves as a historical reminder of how powerful a hawkish Fed can be for the US dollar. The current technical and fundamental picture is beginning to rhyme with the early stages of that previous trend.
