EUR/USD tumbles to three-week lows near 1.0920 as US dollar strengthens

• US dollar gains momentum as US yields soar.
• EUR/USD extends weekly lows after breaking the 1.0950 support area.
• A test of 1.0900 (March 14 low) seems likely.

The EUR/USD broke below 1.0950 and tumbled to 1.0920, reaching the lowest level since March 14. The pair remains under pressure amid a stronger US dollar across the board.

Treasuries tumble, dollar gains

Equity prices are mixed on Tuesdays amid no improvement toward peace in Ukraine and following US economic data. The European Union is proposing new sanctions on Russia. Regarding data, the ISM Service sector index rose in March to 58.3 from 56.5.

Fed Vice Chairwoman, Lael Brainard said on Tuesday that the Fed is prepared to take stronger action if the inflation outlook and inflation expectations indicators suggest the need for such action. New York Fed President John William will deliver remarks in a few minutes.

Treasuries are falling, with the yield on the 10-year bond up 6.80% at 2.56%, the highest level since mid-2019. Yields strengthened the greenback during the American session. The DXY is up 0.35%, trading at 99.35 and could post the highest daily close in almost two years.

Short-term outlook

The break of 1.0950 left EUR/USD vulnerable to more losses. The next strong support area might be seen around 1.0900 (March 14 low), followed by 1.0880. The euro is likely to remain under pressure while under 1.0950. A recovery above would alleviate the negative tone, with the next resistance at 1.0980.

Technical levels