Dollar Sets Fresh Yearly High as EUR/USD Hits Overdecade Low

The US Dollar has set a fresh yearly high as it continues its three-week bullish streak. This week's move is particularly significant, breaking through multiple resistance levels and testing highs not seen since April 2025. The Dollar's strength can be attributed to the Euro's dramatic fall in the EUR/USD pair, which reached its most oversold state in over a decade.

The EUR/USD pair has been experiencing mean reversion tendencies, but recent price action suggests it may be heading towards a trend reversal. The monthly chart shows that the 61.8% retracement of the lifetime move in the pair is just three pips below this week's low at 1.1212.

USD/JPY was relatively calm this week, but the carry trade still retains its influence on USD strength. The daily chart shows that shorter-term structure remains bullish, with buyers stepping in to support pullbacks around 156.68 and 157.22. However, trepidation from bulls on rallies suggests a potential reversal if buyers abandon support.