U.S. retail sales came in close to expectations, while the Philadelphia Fed Manufacturing Index surprised sharply to the upside, likely reflecting improved business sentiment following the Middle East ceasefire and the decline in oil prices. Housing data, however, remained soft. Despite the mixed economic backdrop, Treasury yields pushed higher, with both the 2-year and 10-year yields rising around 4 basis points.

Fed Chair Kevin Warsh also helped shape the market narrative, reiterating that the Federal Reserve’s balance sheet remains too large and should be reduced over time. That has fueled speculation that more aggressive balance sheet runoff could increase Treasury supply, putting upward pressure on yields. Higher long-term rates can tighten financial conditions without requiring additional Fed rate hikes, helping restrain inflation while continuing the balance sheet normalization process.

The rise in Treasury yields has given the U.S. dollar fresh support. In the video above, I quickly review the technical outlook for the major currency pairs, highlighting the bias, the key risks, and the important technical levels to watch.

• EURUSD: The pair has more than doubled its intraday range during the North American session, falling to 1.1437. The next key support comes from the converged 100- and 200-hour moving averages at 1.1424, which represent an important technical barometer. Holding above that level would keep buyers in the game, while a break below would strengthen the sellers’ case.
• USDJPY: The pair has rallied into a key swing area between 162.399 and 162.508, reaching a session high of 162.47. A sustained break above this resistance would clear the path toward the 40-year high at 162.833. If sellers defend the ceiling, look for a pullback toward the 100- and 200-hour moving averages near 162.15.
• GBPUSD: Sterling continues to correct lower, slipping back below the May swing highs at 1.35089 and 1.34854. The next major downside target is the 61.8% retracement at 1.34598, although interim support is found at the 50% midpoint of yesterday’s rally at 1.34689.
• USDCHF: The dollar has benefited from the rise in Treasury yields, with buyers maintaining the near-term advantage. The key question is whether the pair can build on the move higher and extend its recovery, or whether resistance will once again attract sellers and stall the advance.
• USDCAD: The pair briefly broke below the 1.4015-1.4024 support zone, reaching 1.4011, before rebounding back above the area. That recovery has given buyers renewed confidence, with the pair now hovering near unchanged on the day. A move back into positive territory would improve the short-term outlook, exposing today’s high at 1.4053 as the next upside target.
• AUDUSD: The Aussie is drifting back toward important support at the 0.7000 psychological level and the broken 38.2% retracement at 0.6993. A break below that support would increase bearish momentum and shift the focus toward the rising 100-hour moving average at 0.6965