EURUSD falls below key support on strong US jobs data

The EURUSD currency pair has experienced a significant decline, breaking below a critical support zone that had previously held since May 20. This zone, situated between 1.15768 and 1.15872, provided support on four separate trading days. The decisive breach of this level has shifted the technical outlook firmly in favor of bearish sentiment. The downward momentum accelerated earlier today as EURUSD fell below several key technical indicators, including the 200-hour moving average at 1.1628, the 100-hour moving average at 1.1620, and a trendline near 1.1600. These breaks have opened the path for further losses. The next significant downside target is the April 6 low of 1.15046. A break below this level could lead to a focus on the 1.1450 area, with the 2026 low at 1.14089 serving as a more substantial objective. Fundamentally, this currency movement is driven by a sharp increase in U.S. Treasury yields, spurred by a U.S. jobs report that exceeded expectations. The 10-year yield has risen by 6.3 basis points, and the 2-year yield has surged by 11.7 basis points, strengthening the U.S. dollar. The robust employment data also adds complexity to the upcoming Federal Open Market Committee (FOMC) meeting on June 16-17, particularly concerning Fed Chair Kevin Warsh's perspective. At the previous meeting, three policymakers dissented, advocating for the removal of the easing bias. Given the persistent labor market strength and the inflationary impact of rising oil prices, the central bank might consider shifting its policy stance from an easing bias towards a neutral or even more hawkish position. Separately, the USDCHF is breaking higher, pushing above a key resistance zone defined by late-April and late-May swing highs between 0.7923 and 0.7926. The pair has also moved above the 61.8% retracement of the decline from the March 31 high to the May 8 low, which comes in at 0.79345. This breakout gives buyers control, with the former resistance area between 0.7923 and 0.7935 now acting as support. The next upside objective is between 0.7956 and 0.7961, with a sustained move above that level potentially leading to a run toward the 0.8000 psychological level. The fundamental driver for the USDCHF's move higher is the stronger U.S. dollar, supported by the better-than-expected U.S. employment report and sharply higher Treasury yields.