EUR/USD Nears Yearly Low as DXY Continues Strong Rally

The EUR/USD pair has been on a downward trend since before the Federal Reserve's recent rate hike, dropping by over 300 pips and nearing its yearly low set in June at 1.1325.

This decline is part of a broader trend of USD strength, with the DXY index continuing to rally over the past three weeks.

However, the relationship between bond yields and currency values is more complex than often assumed, and the EUR/USD pair's value is best understood in relation to other currencies rather than as a standalone asset class.

The daily RSI indicator for EUR/USD has just entered oversold territory for the first time since June, suggesting that the current downtrend may soon reverse.