• EUR / USD continues a three-day bearish trend amid relentlessly rising US yields.
  • The Fed’s hawkish turn and optimism about the economy are raising returns with the USD.
  • An impending bear cross indicates a breakout of critical support at 1.1683.

EUR / USD is lower for the third day in a row, putting pressure on pivot support near 1.1683, as bears remain relentless amid the ongoing rally in US Treasury yields.

The Fed’s hawkish turn last week, combined with central bank policymakers’ call for a faster-than-expected cut, is pushing up yields alongside the US dollar. Benchmark 10-year Treasury yields jumped to 1.52% from the highest levels seen since June 28.

Meanwhile, ECB President Christine Lagarde left the doors open to higher inflation while adding that there was “every reason to believe” that the rebound in energy prices and the energy bottlenecks. supply bottlenecks would ease over the next year.

In the day ahead, the major currency pair will remain at the mercy of rate and dollar dynamics, as investors wait for Lagarde and Powell to gain attention for the second day in a row on Tuesday.

Looking at EUR / USD daily graphic, the price is testing the critical support of the uptrend line at 1.1683, with a daily candlestick closing below it needed to validate a bearish breakout.

Immediate support is seen at 1.1664 August low, below which the psychological level of 1.1650 will come into play. Further south, the 1.1600 level could call bullish commitments into question.

The Relative Strength Index (RSI) points south below the midline, arguing for further weakness there.

EUR / USD: Daily chart

Alternatively, the rally from the 1.1700 level is essential to initiate a lukewarm rally towards the higher end of the range around 1.1750.

But a bear cross is looming over the said period, suggesting that investors should resort to a “sell the rebound” strategy amid the recent bearish momentum.

The 21-Daily Moving Average (DMA) is about to cut the 50-DMA from above, flashing a bearish signal.

EUR / USD: additional levels to consider

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