EURUSD declines amid rising US Treasury yields

The EURUSD pair has resumed its decline, with traders focused on the 1.1360 support level. The price is currently trading at 1.1346. Find more details in our analysis for 29 September 2026.

EURUSD forecast: key takeaways

• The yield on two-year US Treasuries reached 4.952%, the highest level since May 2024
• The market estimates the likelihood of a Federal Reserve rate hike in October at 69.2%
• Saudi Arabia resumed overseas oil supplies through the key East-West pipeline following repairs to a damaged section
• EURUSD forecast for 29 September 2026: 1.1310

Fundamental analysis

The fundamental backdrop is predominantly in favour of the US currency. At its 16 September meeting, the Federal Reserve raised the policy rate by 25 basis points to a range of 3.75–4.00%, citing resilient economic activity and persistent inflationary pressure. The US economy continues to show resilience in consumer demand, investment activity, and the labour market, allowing the regulator to maintain a relatively tight monetary policy stance. Rising US Treasury yields are also increasing the appeal of dollar-denominated assets to international investors and creating conditions for further strengthening of the US currency.

The European Central Bank is also pursuing a policy of higher interest rates. At its 10 September meeting, the regulator raised its key rates by 25 basis points, taking the deposit rate to 2.50%. According to the ECB's updated forecasts, eurozone inflation will average 3.0% in 2026 and 2.5% in 2027, remaining above the target. At the same time, economic growth for the current year is expected to be just 0.9%. Slower economic growth compared with the US and the persistent interest rate differential are limiting the euro's upside potential.

Geopolitical tensions between the US and Iran are increasing the risk of disruptions to energy supplies, supporting oil prices and fuelling inflation expectations. For the European economy, which is heavily dependent on energy imports, a prolonged period of high oil and gas prices poses an additional threat. Higher production costs and declining household purchasing power could limit economic growth in the eurozone. The EURUSD forecast for 29 September 2026 remains bearish.

Technical outlook

The EURUSD rate has formed a local sideways trend. The EURUSD forecast for today, 29 September 2026, suggests a continued decline towards the 1.1310 target.

On the D1 chart, the EURUSD pair remains in a downtrend, falling to its lowest levels since mid-summer this year. In the short term, a moderate upward correction could develop before the decline resumes. As long as the price remains below the 1.1490 resistance level, the bearish scenario remains valid. The nearest local resistance level is located at 1.1410, while support has formed around 1.1360. A breakout below this mark would open the door for a further decline towards 1.1310, after which the price is likely to enter a consolidation phase.

An alternative scenario suggests a breakout above the 1.1410 resistance level. Consolidation above this mark would indicate easing selling pressure and a move beyond the descending channel. In this case, the EURUSD pair could continue to recover towards the nearest target at 1.1585.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (Intraday)
• Trend: bearish
• Key resistance level: 1.1410
• Key support level: 1.1355

EURUSD trading scenario for today

Trading scenario (Sell Limit)

Consolidation below the lower boundary of the correction channel, with a breakout below 1.1360, would add to selling pressure and indicate a further decline, with a potential target at 1.1310

• Current price: 1.1346
• Entry level: 1.1365
• Take profit: 1.1310
• Stop loss: 1.1375
• Risk-to-reward ratio: above 1:4.5

The trade idea is valid until 8:00 AM on 30 September 2026 (server time, UTC+3).

Risk factors

The main risk factors for the EURUSD pair remain uncertainty over the future monetary policies of the Federal Reserve and the ECB, changes in US government bond yields, inflationary pressure, and geopolitical tensions. Persistently high US interest rates and a further rise in US bond yields could support the dollar and increase pressure on the euro.

Summary

In the short term, further EURUSD performance will depend on buyers' ability to hold a support level at 1.1360, as well as on upcoming macroeconomic releases in the US and the eurozone. Higher-than-expected US inflation and employment figures could boost expectations of further Federal Reserve interest rate hikes, pushing the pair further down. A breakout below the 1.1360 support level would provide the main confirmation of the bearish scenario.

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