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The EUR/USD pair has broken below critical support levels, including a key zone between 1.15768 and 1.15872, which had held since May 20. This breakdown, following a series of technical level breaches such as the 200-hour and 100-hour moving averages, has intensified downward momentum. The next immediate target is the April 6 low at 1.15046, with further downside potential toward 1.1450 and the 2026 low of 1.14089 if the trend continues.
The decline is driven by rising U.S. Treasury yields after a stronger-than-expected U.S. jobs report. The 10-year yield rose 6.3 basis points, and the 2-year yield surged 11.7 basis points, bolstering the dollar. This adds complexity to the Federal Reserve's upcoming policy meeting, where the focus may shift from easing bias to potential hawkish adjustments due to persistent labor market strength and inflationary pressures from higher oil prices.
For traders, the breakdown signals a shift in technical bias toward sellers, with Fibonacci retracement levels and trendline analysis becoming critical for short-term positioning. The Fed's June meeting will be pivotal in determining whether the dollar's strength is sustained. Market participants should monitor Treasury yields, oil prices, and Fed officials' comments for clues on policy direction.
