The EURUSD experienced fluctuations throughout the week. On one occasion, the price decreased but found support at its 200-hour moving average, a broken trendline, and a swing area’s high. This support led to a price increase on Friday.
Upward Momentum
The upward momentum pushed the price above a swing area between 1.1692 and 1.1703, reaching a high of 1.0714. Despite some downward movement, the price remained above the swing area, serving as a close support for the upcoming trading week. Maintaining this level would sustain buyer control.
If the price dips, targets are the 100 and 200-hour moving averages at 1.1666 and 1.1649. Holding these levels would still maintain buyer presence, albeit less strongly.
The next key target on the upside is 1.1787, aligning with the swing high from July 24 and reminiscent of levels from early July. The overall technical bias currently favours buyers.
The buyers seem to be in control of EURUSD, holding the price above the key 1.1692 to 1.1703 area. As we head into the next weeks, this level will be the main line in the sand. Staying above it suggests continued upward momentum.
This technical strength is getting a boost from fundamental news. Recent data showed Eurozone inflation for July 2025 was stickier than expected at 2.5%, making the European Central Bank less likely to cut rates soon. This contrasts sharply with news from the United States.
Fundamental Drivers
On the other side of the pair, the latest US Non-Farm Payrolls report for July 2025 came in at a disappointing 160,000 jobs, well below the 200,000 forecast. This weak labor data increases the chances that the Federal Reserve will consider an interest rate cut before the end of the year. This policy divergence is a strong driver for a higher EURUSD.
For derivative traders, this suggests buying call options with a strike price near the next target of 1.1787 may be a sound strategy. A bull call spread could also be used to lower the cost of the trade while capping potential profit. These positions would benefit if the upward trend continues as expected.
However, we must watch the downside. If the price breaks below the 1.1700 support zone, the bullish outlook weakens. In that case, traders might consider buying put options or establishing bear put spreads to hedge or speculate on a move down toward the 1.1649 moving average.
Looking back, we saw similar dynamics throughout 2024 as the market reacted to every piece of inflation and employment data from both central banks. The sharp interest rate hikes of 2022 and 2023 created a sensitive environment where any sign of economic weakness can shift policy expectations quickly. This is the environment we are still navigating today.
