Insights 
VT 
The EURUSD has recently seen a retracement of recent gains, moving towards the 50% retracement level from the decline beginning on 1st July. This midpoint is at 1.16098, positioned at the bottom of a crucial swing range up to 1.1631.
Currently, the currency pair is trading around 1.16219. Traders are considering the next potential directional movement, with attention on whether the price can return above 1.1631.
Potential For Upward Momentum
If buyers manage to push it above this level, there is potential for upward momentum towards the 61.8% retracement level at 1.16615. This action could affirm bullish momentum in the short term.
However, should the price fall below the 50% retracement point, attention might turn to the 100-hour moving average at 1.1589. Further declines could involve the 200-hour moving average at 1.15487, a point the pair previously used as a base before its recent upward surge.
The EURUSD is pulling back from its recent rally and is now testing a critical support level around 1.1610. This price is the halfway mark of the decline we saw from the high on July 1, 2025. We are watching closely to see if buyers can hold this line against the current selling pressure.
If the price holds above this 1.1610 midpoint, traders should see this as a chance to get long. Short-term call options targeting the 1.1660 resistance level could be a viable strategy over the next week. This view is helped by the latest Eurozone CPI data for July, which came in slightly cooler than expected at 2.1%, easing pressure on the ECB for an aggressive hike.
Signs Of Bearish Momentum
A firm break below 1.1610, however, would tell us the buyers have failed and that momentum is shifting. In that case, we would favor put options with an initial target at the rising 100-hour moving average near 1.1590. This bearish view is strengthened by last Friday’s strong U.S. non-farm payrolls report, which showed 250,000 jobs were added in July and reinforces the dollar’s underlying strength.
We have seen this kind of indecision before, particularly during the central bank policy shifts of 2024 that caused sharp market swings. Given the mixed signals from both the U.S. Federal Reserve and the European Central Bank, implied volatility on options may increase as we get closer to the September policy meetings. This means traders should plan for potentially faster and larger price moves in the weeks ahead.
Should the selling continue past the 1.1590 level, our focus would turn toward the 200-hour moving average at 1.1549. This level was the launchpad for the rally we saw just yesterday, making it a significant support zone. A test of this area would suggest a more serious downturn is developing for the currency pair.
