Following the Federal Reserve’s recent 25 basis point rate cut, U.S. Treasury yields have continued to decline, reinforcing a dovish market sentiment that is weighing heavily on the US dollar (USD). Yields across the curve are down notably:

– 2-year: 3.515% (–4.9 basis points)
– 5-year: 3.697% (–5.7 basis points)
– 10-year: 4.119% (–4.4 basis points)
– 30-year: 4.769% (–2.6 basis points)

This broad-based fall in yields is driving a sharp weakening in the USD against nearly all major currencies. The dollar is only marginally higher against the Australian dollar (AUD), gaining 0.10%. Meanwhile, the euro (EUR) is among the strongest currencies today, appreciating 0.52% versus the USD, with the EURUSD pair standing out as a key mover.

EURUSD Technical Update

EURUSD initially pulled back from yesterday’s sharp Fed-driven breakout, testing last week’s high near 1.1681, where buyers re-entered the market. This support helped push the pair past the 50% retracement level of the September–October range at 1.16929, setting the stage for further gains.

Momentum accelerated as EURUSD broke through several critical resistance levels:

– The October 17 swing high at 1.17274
– The 61.8% retracement level at 1.17461
– A session high of 1.1759, before settling slightly lower around 1.1753

These breakouts confirm growing bullish control and focus attention on the next significant resistance zone.

Key Resistance and Upside Targets

Traders should watch the following areas for potential upside targets:

– 1.1779 to 1.1788: a key multi-touch swing zone acting as immediate resistance
– Above 1.1788: this level could open the way for more accelerated upside moves

As long as EURUSD holds above the 61.8% retracement (1.17461) and especially above the October 17 high (1.17274), the bullish case remains intact.

Short-Term Trend and Support Levels

The short-term trend remains bullish on the 5-minute chart, supported by rising moving averages (MAs):

– 100-bar MA at 1.1719, which is near the 1.17274 breakout level
– 200-bar MA at 1.17065

During the Asian-Pacific trading session, EURUSD tested the rising 200-bar MA where buyers stepped in, pushing the pair higher through the European and North American sessions.

For sellers to gain control, price would have to break below both the 100-bar and 200-bar MAs and remain beneath them. Such a move would signal a loss of short-term buyer dominance and a potential shift in intraday momentum.

Summary

The Federal Reserve’s rate cut has triggered renewed selling in the USD amid falling Treasury yields. EURUSD’s technical structure is decisively bullish, with key resistance levels identified around 1.1779–1.1788. Traders should monitor these levels along with the critical short-term moving averages for clues on momentum shifts.

For a detailed walk-through of the EURUSD technical landscape, including precise risk parameters and key targets, please refer to the accompanying video commentary by Greg Michalowski.

Original Source: Greg Michalowski of investinglive.com