- The dollar strengthens after the opening of Wall Street due to a rise in the yield of Treasury bonds.
- EUR/USD falls to test key very short-term support.
EUR/USD extended the moment of weakness posted fresh daily lows at 0.9953. The pair remains near the lows with negative momentum and pointing to critical support on a strengthening dollar.
The greenback gained momentum in the market in the last hour due to a new rise in Treasury bond yields. The 10-year rate jumped to new highs in years at 3.57%. DXY is up 0.60% and is at 110.25.
The rise of the dollar comes before the start of the two-day meeting of the Federal Reserve. A rise of 75 basis points is expected on Wednesday.
Regarding data on Tuesday, a strong rise in the producer price index was known in August in Germany to a record level of 45.8% per year, due to the spike in energy prices. In the US, housing starts rose higher than expected but building permits contracted sharply.
Should the declines extend, the EUR/USD will face the 0.9950 support zone and the weekly low of 0.9943. Break below could trigger further downside with next support at 0.9910. Hours ago, the pair had risen to 1.0050, but was unable to break through that barrier and started the pullback that is still in progress.
Technical levels
Source: Fx Street
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