Buying EURUSD from 1.1650

EURUSD is trending down locally, driven by a technical rebound in the dollar index. However, in the medium term, the euro still has strong upside potential. This is confirmed by an in-depth analysis of debt, equity, and commodity markets.

The single currency is now well supported by hidden weakness in American Treasuries. The price of 30-year bonds has recently risen to 110.19, pushing their yields down by 0.09%, while 10-year notes have reached 108.84, with returns slipping by 0.01%. At the same time, 5- and 2-year Treasuries showed the opposite dynamic, rising by 0.01%. Still, this does not change the broader picture: major investors appear to be fully pricing in the end of the Federal Reserve’s (Fed) tightening cycle by moving away from long-term US debt assets.

Lower bond yields inevitably weigh on the dollar and its investment appeal, clearing a path higher for the EURUSD pair.

A sharp drop in commodity markets also favors the single currency. Such a sudden decline in energy prices acts as a significant boost for the eurozone’s economy, which is a net commodity importer. This creates a perfect environment for the region: lower fuel spending and easier import-driven inflation. It takes some pressure off the European Union’s trade balance, allowing the national central bank to act way more decisively and aggressively than the Fed.

So, what’s the final word? Declining American yields in tandem with plunging crude prices form a solid bullish foundation for the euro. In the coming sessions, the greenback’s rebound near current resistance levels could be short-lived. Once the dollar heads down again, the pair is likely to resume its rally.

The overall recommendation is to buy EURUSD from 1.16500. Profits should be taken at 1.17150. Stop Loss could be set at 1.16200.

The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.