The U.S. dollar extended its weekly decline on Friday, pressured by falling Treasury yields and growing unease over America’s fiscal position, leaving EUR/USD at $1.1712 and GBP/USD at $1.3676.
The greenback’s retreat followed a sharp shift in sentiment around longer-dated U.S. government bonds after the Treasury said it would double buyback operations to at least $4 billion per operation starting in September. While the initial announcement lifted bond prices and pushed yields lower, concerns over a widening fiscal deficit and a national debt exceeding $40 trillion soon resurfaced, eroding one of the dollar’s key supports: its yield advantage.
Technical levels now loom large for both currency pairs after consecutive sessions of gains. According to the analysis, intraday profit-taking appears increasingly likely before the U.S. market opens, particularly if Treasury yields stabilize or short-covering demand emerges. Traders are advised to monitor signals such as rejection from resistance zones, weakening bullish momentum, increased selling volume, failure to hold above today’s highs, or a confirmed rejection—any of which could signal a short-term corrective move.
The analysis suggests selling EUR/USD between $1.1710 and $1.1720 with downside targets at $1.1676, $1.1666, and $1.1656. For GBP/USD, the recommended entry range is $1.3675 to $1.3685, targeting $1.3626, $1.3616, and $1.3606.
The medium-term outlook remains dollar-negative as the euro and pound retain their upward bias, but the risk of intraday profit-taking has risen after a strong weekly advance. Both pairs have entered important resistance territory, making the upcoming U.S. session pivotal. A modest rebound in the dollar could trigger a sharper corrective decline toward the first downside targets. The analysis emphasizes that this is a market framework, not a guarantee of future price movement, and that forex trading carries substantial risk, especially during periods of elevated volatility.
