Summary of USD Strength Analysis

The article provides a technical analysis of the USD's performance against major currency pairs, highlighting a notable increase in demand for the USD despite a decline in US yields. The analysis covers the EURUSD, USDJPY, GBPUSD, USDCHF, and AUDUSD pairs, indicating a strong bullish sentiment for the USD across most of these currencies.

Key Highlights

• USD Performance: The USD is reaching new session highs against the EUR, GBP, CHF, and AUD, indicating renewed demand. This occurs even as the 2-year and 10-year US yields decline, suggesting that market flows and positioning are currently more influential than rate dynamics.
• Equity Market Reaction: While oil prices remain stable, equities are losing momentum. The Nasdaq has reverted to unchanged levels, while the S&P and Dow are showing modest gains, but the overall market tone is less convincing as the session progresses.

Technical Analysis of Major Currency Pairs

EURUSD

The EURUSD has broken below a significant swing area between 1.1484 and 1.1491, establishing this zone as a risk-defining level for sellers. Maintaining a position below this level keeps the bearish bias intact, with the next target set near the March lows at 1.1407.

GBPUSD

The GBPUSD has seen sellers gain control after breaking below the March/2026 lows between 1.3217 and 1.3229, which now serves as resistance. The next downside target is identified within a daily swing area between 1.3138 and 1.3178.

USDJPY

Initially, the USDJPY moved lower, breaking below its 100-hour moving average at 159.45. However, momentum stalled near a key upward trendline and the 200-hour moving average at 159.18, where buyers have since stepped in, indicating a potential rebound despite ongoing concerns about yen weakness.

USDCHF

The USDCHF has reached new highs, breaking above a critical swing area between 0.7978 and 0.7989, which shifts the bias firmly to the upside. The pair has surpassed the psychological resistance level at 0.8000, with a high of 0.8005. Holding above this level keeps buyers in control, with further upside potential.

AUDUSD

The AUDUSD has broken below a significant swing area from last week between 0.6896 and 0.6908, indicating a clear downside shift. This breakdown is significant as it opens the path for sellers, with the next support levels identified near 0.6800 and 0.6765, and a longer-term target at the January low of 0.6658.

Conclusion

Overall, the USD is exhibiting strong control across the major currency pairs. The EURUSD and GBPUSD have broken key support levels, maintaining a bearish outlook with potential for further declines. The USDCHF is showing bullish momentum, while the AUDUSD has entered a phase of significant downside potential. The USDJPY remains an exception, with buyers defending key support levels, but overall USD demand is beginning to reassert itself.