EUR/USD extends decline as bond sell-off keeps dollar in control
EUR/USD is trading around 1.1230–1.1240 on October 2 and remains in a pronounced downtrend, having already broken below the 1.1390–1.1470 and 1.1330–1.1370 zones that previously acted as support. The price is trading well below its main moving averages, while the nearest local low is around 1.1215–1.1220.
1.1240
1.1214
Treasury yields reinforce pressure on euro
Pressure on the euro intensified amid a sharp sell-off in global bond markets. The 10-year U.S. Treasury yield climbed to 5.344% on Thursday, its highest level since 2002, before stabilizing around 5.24–5.25% on October 2. Pressure also increased in the French bond market, with the spread between French and German 10-year yields widening to around 149 basis points amid concerns over France’s budget and the state of public finances.
Against this backdrop, the dollar rose to around 17-month highs, while EUR/USD remains near its lowest levels since May 2025. Higher U.S. Treasury yields increase the relative appeal of dollar-denominated assets, while debt-related risks in Europe are putting additional pressure on the euro. After yesterday’s surge in yields, buyers returned to the U.S. Treasury market, allowing the 10-year yield to retreat from 5.344%.
NFP becomes next major catalyst
The next key event for EUR/USD will be today’s U.S. labor market report. The BLS will release September Nonfarm Payrolls at 12:30 GMT. Market consensus is around 89,000–90,000 new jobs, down from 162,000 in August, while the unemployment rate is expected to remain near 4.1%. The bond market reaction will be especially important for the pair: data well above expectations could push Treasury yields higher again and increase pressure on 1.1220–1.1200, while a weak report could trigger lower yields and a technical rebound in EUR/USD.
Sellers remain active on rebounds
After breaking several important levels, the pair remains in a sustained downtrend, so rebounds toward 1.1280–1.1320 following the NFP release could again be used for selling. A break above the latter level, as noted in EUR/USD extends decline as technical breakdown deepens, could open the way toward 1.1350–1.1370, which could also be used as another selling area.
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