EURUSD Slides Lower After Key Support Break; Technical Bias Shifts to Sellers

EURUSD Technical Breakdown and Fundamental Drivers

The EURUSD pair continues its downward trajectory after breaching a pivotal support zone between 1.15768 and 1.15872. This level had acted as a reliable floor since May 20, with the pair testing it on four separate occasions between May 20 and May 28. The decisive break below this zone has tilted the technical outlook decisively in favor of sellers.

The sell-off gained momentum earlier today as EURUSD pierced several key technical levels in rapid succession. These included the 200-hour moving average at 1.1628, the 100-hour moving average at 1.1620, and an ascending trendline near 1.1600. The breach of these markers has cleared the path for accelerated downside pressure.

Looking ahead, the next immediate target lies at the April 6 low of 1.15046. A sustained move below this threshold could draw attention to the 1.1450 psychological level, with the 2026 low at 1.14089 representing a more substantial downside objective.

Fundamental Catalyst: Strong US Jobs Data and Yield Surge

The fundamental backdrop remains supportive of the US dollar, driven by a surprisingly robust US jobs report. The data has propelled US Treasury yields higher, with the 10-year yield climbing 6.3 basis points and the 2-year yield surging 11.7 basis points. This yield rally reinforces the dollar's appeal and adds upward pressure on the EURUSD pair.

The employment figures have also introduced fresh uncertainty ahead of the upcoming FOMC meeting on June 16-17. Notably, three Fed policymakers previously dissented at the last meeting, advocating for the removal of the easing bias. With labor market resilience persisting and oil prices edging higher, inflation expectations may intensify, potentially shifting the Fed's stance toward a more neutral or hawkish posture.

Implications for Forex Traders

Traders are advised to monitor the 1.15046 level closely, as a confirmed break could open the door for further declines. The confluence of technical weakness and fundamental dollar strength suggests a cautious approach to long positions in EURUSD.

Risk sentiment remains tilted toward the dollar, with global markets reacting to the combination of strong US data and rising yields. Investors should also keep an eye on central bank communications, particularly from the Fed, as policy direction becomes increasingly uncertain.

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