US Dollar Surges on Renewed Rate Hike Bets, EUR/USD Hits Key Support Levels
The US Dollar has experienced its strongest weekly performance in over a month, as market expectations of another Federal Reserve rate hike have increased. This shift in interest rate outlook has put downward pressure on the EUR/USD pair, which is now testing key support levels after failing to sustain a rally above 1.0900.
The catalyst for the dollar's rebound is the change in market pricing for Federal Reserve policy, prompted by stronger-than-expected US economic data. This has lifted US Treasury yields and widened the yield differential between US and German bonds, making dollar-denominated assets more attractive to yield-seeking investors.
From a technical perspective, the EUR/USD pair has broken below its 50-day moving average, a bearish signal that has attracted momentum sellers. The immediate support zone lies between 1.0760 and 1.0780, which corresponds to the April low and a key Fibonacci retracement level.