EUR/USD Strengthens as Dollar Weakness Continues

The EUR/USD outlook remains mildly bullish as investors continue to favor currencies backed by relatively stronger fiscal positions. The flight to quality has seen gold, silver, and other assets gain ground in recent days.

The US dollar's weakness is partly due to the rise in bond yields across developed markets. However, the US Treasury's intervention, which saw increased purchases of longer-dated Treasuries, appears to have failed to produce a lasting decline in borrowing costs.

Technical analysis suggests that the EUR/USD pair has broken above its previous bearish trend and is now targeting 1.1800, where the 61.8% Fibonacci retracement sits. However, investors should remain cautious as the near-term backdrop remains uncertain, particularly ahead of key events such as the release of US core PCE price index data and the Jackson Hole symposium.