The EUR/USD currency pair is hovering steadily around the 1.1680 level during Monday’s early European trading session. Although the pair maintains a constructive underlying tone, temporary selling pressure or a consolidation phase cannot be entirely ruled out due to overbought Relative Strength Index momentum pressing against immediate gains.
Technical Indicators and Overhead Resistance
On the daily chart, the EUR/USD pair maintains a bullish near-term bias as spot prices remain comfortably above the 20-day Bollinger middle band and the 100-day simple moving average. Prices are currently pressing into the upper boundary of the recent trading range, sitting just beneath the upper Bollinger band. Meanwhile, the 14-day Relative Strength Index hovers around 73, signaling overbought conditions that could temper immediate upside momentum despite the supportive technical structure.
On the topside, initial resistance is spotted right at the Bollinger upper band around the 1.1705 mark, where buyers are likely to encounter profit-taking. On the downside, initial support rests near the 100-day simple moving average around 1.1575, followed closely by the 20-day Bollinger middle band at 1.1558. A deeper structural floor remains anchored near the lower Bollinger band close to 1.415.
US Treasury Actions and Bond Yield Dynamics
In broader macroeconomic developments, the US Treasury department continues to drive market sentiment. US Treasury Secretary Scott Bessent announced on Thursday that the department would double its long-end bond buyback operations to $4 billion per operation in an effort to cap surging 30-year yields. This announcement followed a previous disclosure from the department pledging to at least double the scale of longer-dated debt buybacks to rein in rising borrowing costs.
Notably, the US Treasury moved off its regular schedule on Wednesday. At 12:32 GMT, the department stated it would at least double the size of liquidity support buyback operations across the 10-year to 20-year and 20-year to 30-year sectors, raising the maximum cap from $2 billion per operation to at least $4 billion, effective from September 9 through November 4.
Market participants remain concerned over a deteriorating fiscal outlook and ongoing uncertainty surrounding the Federal Reserve policy path, which continues to exert selling pressure on the Greenback. Concurrently, gold extended its stellar performance into Monday's Asian trading session, refreshing three-month highs beyond $4,600 as it capitalized on persistent US Dollar weakness alongside fresh US-Canada trade tensions.
Secretary Bessent is scheduled to hold a press conference on Monday at 18:00 GMT following threats of imposing "the toughest sanctions in history" on Iran, with market participants closely watching whether China will also be targeted. Iranian Foreign Minister Abbas Araghchi dismissed the threat of fresh US economic sanctions as a desperate ploy, stating via Reuters that the expected new measures would fail to defeat Tehran. Ongoing geopolitical tensions between the United States and Iran could potentially trigger safe-haven capital flows back into the Greenback.
Meanwhile, other major currency pairs are also seeing active movement. The GBP/USD pair is trading with a positive bias around the mid-1.3600s at the start of the week, remaining within striking distance of its highest level since February 11 touched on Friday. Similarly, EUR/USD remains resilient for the fourth successive trading session as the US Dollar struggles under pressure from newly announced fiscal policy adjustments.
