Tuesday reinforced Monday’s direction: the dollar stayed under pressure, this time with a clearer macro excuse, US data pointing to slower growth and a notable decline in US yields. With Treasury yields falling over multiple sessions, the dollar’s yield advantage compressed, and that dynamic flowed cleanly into major USD pairs.
The yen remained supported for a second session as post-election repricing continued, keeping USD/JPY heavy and headline-sensitive.
EUR/USD
Technical Analysis
EUR/USD held toward the upper end of its recent range. The technical signal was persistence: no major breakout, but consistent defense of higher levels. This kind of tape usually reflects “USD offered, but buyers selective” rather than euphoric euro demand.
Fundamental Analysis
Dollar pressure stemmed from softer US growth perception and falling yields, both of which tend to lift EUR/USD even in a catalyst-light Eurozone session.
GBP/USD
Technical Analysis
GBP/USD continued to firm, with price action resembling a controlled grind rather than a trend day. Intraday pullbacks looked corrective and were often met with buyers.
Fundamental Analysis
Sterling’s support came from the same “USD repricing” driver. When US yields fall and the market questions growth momentum, GBP/USD often performs alongside EUR/USD unless UK-specific risk dominates, which it didn’t on Tuesday.
USD/JPY
Technical Analysis
USD/JPY remained heavy, with rallies failing quickly, classic “sell the bounce” behavior. Technically, that suggests the market saw the yen move as more than a one-session reaction, and positioning began to shift accordingly.
Fundamental Analysis
Yen strength extended as fiscal fears diminished somewhat and the post-election adjustment continued. Combined with falling US yields, the pair had both a domestic JPY bid and a USD yield headwind.
Market Outlook
If US yields continued to fall, the USD downside could persist. But markets were approaching a pivot: upcoming labor/inflation signals would determine whether the “slower growth” narrative sticks or snaps back.