USD Surges to New Highs Amid Exhaustion Signs
The US Dollar Index and major dollar pairs are testing new highs, putting pressure on the euro and pound. The EUR/USD daily RSI has fallen to oversold levels last seen in 2020, indicating a potential reversal risk.
Momentum indicators across yields and currencies are beginning to show signs of exhaustion, raising the risk of a near-term pullback as we enter the fourth quarter of 2026. US Treasury yields are testing highs last seen in 2002, with the 10-year yield nearing 5.3%.
The DXY's new 2026 high near 102 is facing clear resistance aligned with the 38.2% Fibonacci retracement of the 2025-2026 downtrend. A breakdown below this level could coincide with a longer-term reversal in Treasury yields and allow a stronger rebound in global currencies.