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The EUR/USD pair has fallen below its 200-day moving average (1.1681) following the Federal Reserve's rate decision and hawkish comments from Chair Jerome Powell, which pushed U.S. Treasury yields to multi-month highs. The 2-year yield rose to 4.00% and the 10-year yield hit 4.417%, while crude oil prices surged 7.15%—the largest daily gain since April—to 79.85 dollars per barrel. Technically, the pair broke below the 100-day MA at 1.1675, with bears maintaining control below the 200-day MA and 38.2% Fibonacci retracement level. The 200-day MA at 1.1681 now acts as critical resistance for potential short-term reversals.
The bearish bias for EUR/USD is reinforced by rising U.S. yields and inflationary pressures from energy prices, which support the USD. Traders should monitor the 200-day MA as a key level—break below 1.1662 could extend losses toward 1.1500, while a rebound above 1.1681 might trigger a corrective rally. The Fed's policy trajectory and oil price volatility remain pivotal for near-term USD momentum.
For MENA investors, the EUR/USD breakdown highlights the USD's dominance in a high-yield environment. Gulf-based forex traders should watch the 1.1681 level closely, as a sustained break below this level could signal a larger downtrend. Additionally, oil price movements will influence inflation expectations and central bank policies, indirectly affecting currency pairs like EUR/USD.
