EUR/USD Rips to 1.1710, Highest Since May 14, as Treasury Buybacks Break the Dollar

The euro traded 1.1710 against the dollar on Friday, up 0.21% on the session and the highest level in more than three months. That print matches the intraday peak set Thursday at 1.1710 and edges the weekly high of 1.17065 recorded on August 20. The pair is running a weekly rally north of 1%, having started the week at 1.1528 — the low printed on August 13 — and it is now up 2.50% over the past month.

The move has structure behind it. EUR/USD closed August 20 at 1.1684, having broken through the 200-day simple moving average at 1.1631 and the 61.8% Fibonacci retracement of the April-to-June decline at 1.1644 in the same session. Both of those lines had capped every recovery attempt since the summer lows. The pair has since held above them on two separate retests, which is the difference between a break and a bounce.

The cycle low is 1.1323, printed in June — the weakest level since July 2025. From there the euro has rebuilt 387 pips, and the advance off that base has developed the higher-low sequence that separates a genuine recovery from a short-covering pop. The downtrend that capped the pair from February through July is broken.

The scale of what remains is worth stating. EUR/USD hit 1.20834 on January 27, its 2026 peak, then spent five months unwinding it as the Fed turned hawkish under a new chair and US data proved resilient. February 23 delivered 1.1830. June 25 delivered 1.1354. The pair is up 0.62% over twelve months — a rounding error that captures how much round-tripping has happened.

What changed this week is that both legs of the trade started pulling the same direction for the first time since spring. The dollar broke because the Treasury intervened in its own bond market. The euro caught a bid because eurozone activity data came in stronger than anyone modelled. Neither of those is a one-day story.

The dollar index sat at 98.67, down 0.17%, after revisiting a fresh three-month low at 98.56 on Thursday. The greenback was weakest against the Swiss franc this week — a tell that the flow is not about relative growth but about something structural in the dollar itself.

Bessent's Buyback Broke The Dollar, Not The Bond Market

The catalyst was aimed at yields and hit the currency instead.

On Wednesday the US Treasury announced it would at least double the size of its buybacks on longer-dated securities over the next quarter, lifting them from $2 billion to at least $4 billion per operation and targeting 10-, 20- and 30-year debt. The program scales up starting September 9. Yields collapsed on the headline, the 30-year fell as much as nine basis points to 5.19%, and the dollar plunged across the G10 complex. EUR/USD went from 1.16 to 1.1676 in a session.

By Thursday the bond market had rejected the entire premise. The 30-year climbed seven basis points back to 5.26%, erasing the move and returning to where it sat before the announcement. The 10-year pushed to 4.70%, five basis points from a 20-month high. Bessent went on television to say he may increase the repurchases further and flagged a fiscal initiative to address borrowing costs. Long yields did not care.

The dollar never recovered. That divergence is the whole trade.

The mechanism running underneath is liquidity, not rates. Doubling the repurchase limit on long-term notes and bonds pulls cash out of the Treasury General Account and into the private system — it raises dollar supply. Washington has signalled it is prioritizing lower long-term yields and is willing to expand the dollar float to get there. In a fixed-supply-versus-demand framework, that is straightforwardly negative for the currency regardless of what happens to the yield curve.

The standard interest-rate channel would say lower Treasury yields weaken the dollar and that is that. This episode broke the pattern in a way that matters: gold ripped to $4,601.52, bitcoin ran to $79,241, and the dollar kept falling even after yields fully reversed. That combination points at fiscal credibility rather than rate differentials. The plausible end state is unchanged long-term yields alongside a structurally softer dollar.

The arithmetic supports the read. US marketable debt outstanding exceeds $30 trillion. From July through December 2026 the Treasury expects to borrow more than $10 billion net every single business day. Two Federal Reserve officials publicly expressed caution about how the Treasury's debt-management changes affect monetary policy — which is the tension the currency is now pricing.

The Eurozone PMI Print Handed The Euro Its Own Leg

The euro spent most of 2026 as a passenger. Friday's data changed that.

The flash Eurozone Composite PMI Output Index edged up to 52.1 in August from 52.0 in July, the highest reading since last November and comfortably above the 51.7 consensus. That is the ninth consecutive month above the 50 line and it points to third-quarter GDP growth around 0.3%, following a 0.4% expansion in Q2. For an economy that spent most of the second quarter in contraction while absorbing an energy shock from a closed Strait of Hormuz, that is a genuine result.

Manufacturing carried it. The flash Manufacturing PMI jumped to 52.8 from 51.9, a four-and-a-half year high that blew past the 51.8 estimate. The Manufacturing Output Index climbed to 53.4 from 52.9 — the strongest reading in 54 months. Germany drove the upturn. Services Business Activity held steady at 51.7 against forecasts calling for a slide to 51.0, with growth outside the two largest economies doing the work and tourism pushing services activity to its fastest pace in more than three years.

The employment line is the one policymakers will read twice. Firms added staff in August for the first time this year. Service providers raised their rate of job creation, and manufacturing employment increased fractionally — ending a sequence of job shedding that has run for more than three years.

Price pressures eased. Services selling price inflation fell back to the joint-lowest level so far this year, matching March, and goods price inflation continued to moderate. That is the disinflation signal the ECB wants. It is not enough on its own — headline inflation ran 2.9% in July, well above the 2% target, and near-term risks tilt toward the headline pushing past 3% and reaching just under 4% by year-end if energy stays elevated.

The forecast context matters. Consensus had services at 51.6 and manufacturing at 51.9, essentially unchanged from July, with some desks calling for a slowdown on renewed energy pressure. The print delivered acceleration instead. Final data have come in better than the initial flash readings for five consecutive months, which means the August number may be revised higher still.

Resilient growth, strengthening manufacturing and renewed hiring against elevated inflation is a hawkish growth-inflation mix. That is euro-positive on its own terms.

France Is Still The Hole In The Floor

The headline masks a split that has defined the eurozone all year, and it is worth pulling apart before anyone extrapolates the composite.

France posted a flash Composite Output reading of 48.8 in August, with services at 48.4 — both firmly in contraction. Consensus had looked for manufacturing at 49.9 against 49.8 prior and services at 49.7 against 49.6. The manufacturing side actually returned to expansion, which is progress, but the services engine that drives the bulk of French output kept shrinking and did so at a marginally faster pace than July.

Taken with July's contraction, that puts the eurozone's second-largest economy on track for another sub-par quarter. French business confidence was expected at 100 against 101 prior. Domestic demand is not recovering, and French political risk has been an intermittent drag on the euro throughout 2026.

Germany went the other way. Consensus called for German manufacturing to tick down to 52.0 from 52.2 and services to improve to 50.2 from 49.8. The actual eurozone-wide manufacturing surge to a four-and-a-half year high was described as led by Germany, and German fiscal easing is increasingly visible in the activity data. The largest economy in the bloc has stopped being the problem and started being the engine.

The rest of the eurozone outperformed both. Growth outside France and Germany was stronger than either, with tourism lifting services to a three-year high. That breadth is new. For most of 2026 the composite was carried by one country at a time while the others contracted.

For the currency, the split cuts two ways. A eurozone growing at 0.3% quarterly with manufacturing at a four-and-a-half year high supports a second ECB hike and therefore supports the euro. A eurozone where the second-largest member is in outright contraction and where energy costs are still climbing is not a durable growth story, and it caps how far rate differentials can move in the euro's favor.

The German fiscal impulse is the variable that decides which read dominates into Q4. If infrastructure and defence spending keep lifting industrial demand, the composite holds above 52 and France becomes a footnote. If it fades, the bloc slides back toward stagnation and the ECB's hawkish bias evaporates.

The 200-Day At 1.1631 And The 61.8% At 1.1644 Are Now Support

The technical picture flipped this week, and the flip was clean.

The 200-day simple moving average sits at 1.1631. The 61.8% Fibonacci retracement of the April-to-June decline sits at 1.1644, thirteen pips above it. Those two lines formed a resistance band that capped every rally attempt from February through July. On August 20 the pair traded straight through both, and it has since held above them on two retests.

That is the definition of a regime change on the daily chart. Acceptance above the 200-day converts the moving average from a ceiling into a floor, and it means systematic strategies that were positioned short the euro against that line have flipped or are flipping.

The 100-day moving average was the tactical line the pair closed on last week, and it has been left behind. More significantly, the downtrend that contained EUR/USD from February through July is now broken, with buyers defending every dip since the base formed in July. The advance carries a higher-low structure — the sequence that separates a recovery from a bounce.

The bullish near-term bias holds as long as the pair stays above 1.1644 and the broader recovery off the 1.1323 cycle low remains intact. Dips into that zone should attract buying rather than trigger stops.

Below the primary support band, the chart's own 200-period moving average on the intraday setup sits near 1.1606, with the round 1.1600 handle just beneath. That is the first line where a genuine failure would register rather than a routine retracement.

The next objective on the way up is the 78.6% Fibonacci retracement at 1.1731 — twenty-one pips above Friday's high. Clearing that opens the April swing high near 1.1843, which is also close to the February 23 peak of 1.1830. Above that, the January high at 1.20834 is the only meaningful reference left.

The structural read: the pair has repaired roughly two-thirds of the April-to-June decline and now sits at the point where the remaining third gets decided. The 1.1710 to 1.1731 band is the gate.

The Levels: 1.1731 Overhead, 1.1644 And 1.1583 Underneath

Immediate resistance. 1.1710 is the line that has rejected twice — once on Thursday's intraday high and again on Friday. A daily close above it is the first confirmation. The measured objective beyond is the 78.6% retracement at 1.1731.

Above that. Clearing 1.1731 opens the August highs and then the April swing high near 1.1843, with the February 23 peak of 1.1830 sitting in the same zone. That band represents 133 pips of upside from current levels and would put the pair back inside the range it occupied before the spring breakdown.

Extended. The January 2026 high at 1.20834 is the cycle target and requires another 3.2%. No published consensus forecast has the pair there before 2027.

First support. The 61.8% retracement at 1.1644 is the line that matters most. It flipped from resistance to support on the break and has held. Losing it on a daily close puts the entire recovery structure in question.

Second support. The 200-day SMA at 1.1631 sits immediately beneath. The two together form a 13-pip band that functions as a single defensive zone. Below them, the intraday 200-period average near 1.1606 and the round 1.1600 handle come into play — a clean break of 1.1600 would signal the dollar's stabilization is developing into a broader recovery rather than a pause.

Deeper. The next Fibonacci reference sits at 1.1583, followed by 1.1521. Those are the levels that come back into play if the September policy divergence trade unwinds. Below 1.1521, the August 13 low at 1.1528 has already been taken out, and the structure points back toward 1.1450.

Structural floor. The June cycle low at 1.1323 is where the recovery began. Only a Fed hike combined with a eurozone growth stall gets the pair back there.

The clean framing for the next two weeks: above 1.1644 the bias is higher with 1.1731 the target. Below 1.1600 the recovery is void and 1.1583 to 1.1521 opens. Between those two lines is noise.

1.1710 Has Rejected Twice — The Overbought Problem

The momentum picture is the argument against chasing this.

EUR/USD declined from 1.1710 on Thursday to take profit and work off what were described as clearly overbought conditions on the relative strength indicators, with negative signals beginning to emerge. It then returned to the same level on Friday and stalled again. Two rejections at an identical print inside twenty-four hours is a supply zone, not a coincidence.

The pair has rallied from 1.1528 on August 13 to 1.1710 — 182 pips in six sessions, roughly 1.6%. For a G10 major with the volatility profile EUR/USD has carried through 2026, that is a fast move, and it has come with the short-term trend line supporting price the entire way. Trends that steep either consolidate sideways or retrace to the trendline.

The constructive read is that the short-term bullish structure remains dominant, price continues to trade along its supporting trend line, and a period of digestion would allow the pair to gather positive momentum and resume the advance through 1.1710. Overbought in an uptrend is not a sell signal — it is a timing problem.

The risk read is that negative divergence on the oscillators, combined with two failed attempts at the same level, is exactly what precedes a retracement toward 1.1644. A pullback that holds there and turns confirms the break. A pullback that slices through it says Thursday's move was a liquidity event driven by the Treasury headline rather than a repricing of relative policy.

The catalyst risk sits with the US flash PMI release on Friday afternoon. Consensus looks for manufacturing unchanged at 53.9 and services easing to 54.0 from 54.6, with some desks calling the composite down to 53.2 from 54.5. Those are strong absolute numbers — US activity is running well above eurozone levels even after the euro area's beat. A firm US print narrows the growth-differential argument and gives the dollar a reason to bounce off 98.56.

An upside US surprise takes EUR/USD back toward 1.1644 fast. A miss opens 1.1731 into the weekend on thin liquidity.

September 10 Versus September 16: The Divergence Trade

Everything from here runs through two central bank meetings six days apart.

The European Central Bank decides on September 10. Markets have been pricing roughly 79% to 84% probability of a 25-basis-point hike, which would be the second of 2026 following the first-since-2023 move earlier this year. A poll of economists forecast the ECB raising rates again next month. The reasoning is straightforward: headline inflation at 2.9% in July with near-term risks pointing past 3% and toward 4% by year-end on energy, against a growth backdrop that just delivered its best composite PMI since November.

The Federal Reserve decides on September 16. The funds rate has sat at 3.50% to 3.75% for five consecutive meetings. Market pricing assigns 69.9% probability to another hold and roughly 31% to a 25-basis-point hike. Those odds have collapsed from nearly 100% hike probability in late July after soft jobs, CPI and PPI prints landed in the same week.

That is the divergence trade in its cleanest form: ECB tightening, Fed on hold. It is the single scenario that historically sends EUR/USD toward 1.22 to 1.25, and it is the reason the pair has broken its 200-day.

The complications are real. Jobless claims fell to 206,000 for the week ending August 15, below the 210,000 expected and down from an upwardly revised 212,000. That is not a labour market cracking. A senior Fed official said this week that rising bond yields do not give a signal for policy and that policy is in a good place — a hold-and-wait posture rather than a dovish pivot.

On the euro side, the August PMI showed services selling price inflation at the joint-lowest level this year. Softer selling prices give the Governing Council room to hike once and then pause rather than commit to a cycle. The expectation from the more cautious desks is exactly that: 25 basis points in September, then stop.

If both of those land — a Fed hold and an ECB one-and-done — the divergence is a one-quarter story, not a trend. That caps how much of the 1.1843 to 1.2083 zone is realistically reachable this year.

The Fed's 9-3 Split And Why The Minutes Actually Mattered

The July FOMC minutes released Wednesday were the second-largest driver of this week's dollar move, and the reason is structural rather than substantive.

The July 28-29 meeting held rates on a 9-3 vote, with three officials dissenting in favor of a hike. Under the current chair, the Fed has deliberately removed forward guidance from its post-meeting communication — no road map issued between meetings, no committed path. That makes the minutes one of the few genuine windows into how the Committee is reasoning, which inverts the normal treatment of a backward-looking document.

The question the market cared about was not the vote. It was how close the other members were to joining the dissenters. Three preferring a hike is either a fringe position or the visible edge of a near-majority, and the entire September pricing rests on that distinction.

The minutes confirmed that many officials think the central bank will have to lift rates in the coming months if inflation does not subside. They did not specify how many of the 19 policymakers supported that view, and only 12 of the 19 vote on outcomes. The read the market took was hawkish-but-inconclusive — enough to keep 31% hike probability alive, not enough to move it back toward the 100% pricing of late July.

EUR/USD hit 1.1676 on the release, its best level since June. The euro rallied on a hawkish minutes print, which tells you the dollar's problem this week is not the Fed at all. It is the Treasury.

That is the uncomfortable dynamic. The Fed is relying on elevated long-end yields to tighten financial conditions on its behalf. The Treasury is intervening to suppress those same yields. If the Fed hikes on September 16 while the Treasury is running expanded buybacks from September 9, the two arms of US economic management are working against each other in public. Currency markets price that kind of institutional conflict as a risk premium on the dollar, not as a rate-differential story.

One published view holds that the Fed will try to get away with not hiting this year at all. Another had forecast three hikes in the second half of 2026. That spread is the honest measure of visibility.

Jackson Hole On August 28 Is The Near-Term Landmine

Before either central bank meets, there is a speech.

The Kansas City Fed hosts the 2026 Jackson Hole Economic Policy Symposium from August 27 to 29 at Jackson Lake Lodge. The Fed chair delivers the keynote on Friday morning, August 28 — his first Jackson Hole address since taking office on May 22, 2026.

That matters more than a normal symposium for the same reason the minutes mattered. With forward guidance deliberately withdrawn from the statement, a keynote is one of the few venues where the chair sets a direction. Every sentence will be parsed for a shift away from the Fed's recent aversion to signalling.

The setup is asymmetric for EUR/USD. The dollar is already at a three-month low with the pair pressing a three-month high, and positioning has moved substantially in one direction over six sessions. A hawkish keynote — any suggestion that September is genuinely live, or that the Committee is closer to the dissenters than the minutes implied — lands into crowded euro longs and produces a sharp unwind toward 1.1644 or lower.

A dovish or neutral keynote confirms the hold, extends the divergence trade, and clears the path through 1.1731 toward 1.1843.

There is a second US event in the same window. July PCE — the Fed's preferred inflation measure — is released next week, and it will be the last report of its kind before the methodology changes. Under a chair who has floated reviewing which indicators the Fed targets and has set up task forces to make recommendations, a changing inflation gauge is not a technicality. It is a potential lever for justifying whichever stance the Committee prefers, and currency markets will treat it accordingly.

The euro side has its own calendar. Q2 negotiated wage data was released alongside the PMIs, with growth expected to ease to 2.4% year-over-year from 2.5% in Q1. Softer wage growth removes second-round inflation pressure and gives the ECB an argument for one hike then a pause — which is euro-negative at the margin even as the hike itself is euro-positive.

Between August 27 and September 16 there are four events capable of moving this pair 100 pips or more.

Energy Is The Euro's Own Poison Pill

The variable that could break the divergence trade is not a central bank. It is a barrel.

Brent crude traded above $94.50, its highest since late July, after the US escalated economic pressure on Iran. Trump warned of severe consequences for any country maintaining financial or commercial ties with Tehran, and Bessent promised the toughest sanctions in history with a press conference scheduled for Monday. WTI sat at $86.51. Crude is up more than 5% on the week and heading for a second consecutive weekly advance.

European natural gas prices are soaring on supply shortages traced back to the Middle East. That is the transmission channel that matters for the euro, and it runs in both directions at once.

The euro-positive channel is inflation. Higher energy costs push euro-area headline inflation further above the 2% target, strengthening the case for the September hike and for the hawkish bias to persist into Q4. Near-term risks already tilt toward headline pushing past 3% and reaching just under 4% by year-end. An ECB forced to keep tightening while the Fed holds is exactly the rate-differential story that drives EUR/USD higher.

The euro-negative channel is growth. The eurozone is a net energy importer running a structural terms-of-trade deficit every time crude and gas rise. The bloc absorbed one energy shock this year already and the composite PMI spent most of Q2 in contraction as a result. August's 52.1 reading came despite the disruption, not because it resolved. Renewed upward pressure on energy prices weighs directly on activity, and if Hormuz stays restricted through Q4 the manufacturing recovery that just hit a four-and-a-half year high loses its foundation.

Which channel dominates depends on duration. A short spike is inflationary and euro-positive because the ECB reacts before the growth hit lands. A sustained blockade is stagflationary and euro-negative, because the ECB ends up hiking into a slowdown and the currency prices the growth damage rather than the rate.

Ship transits through Hormuz ran 73 in the week ended August 16, down from 91 the prior week, against roughly 130 daily crossings before the conflict. There is no visible path to normalization. That argues the energy overhang persists, which is the single largest medium-term risk to the euro leg of this trade.

Cross-Currency: The Franc Led, Sterling Cleared 1.3650

The dollar's weakness this week was broad, and the ranking tells you what kind of move it was.

The greenback was weakest against the Swiss franc across the week — the classic haven bid that shows up when capital is questioning an issuer rather than repricing growth. The franc outperforming the euro on the same dollar-negative news is the cleanest evidence that this is a credibility trade, not a rate trade.

Sterling extended its weekly rally to trade above 1.3650, the highest level since February, and it did so despite genuinely weak domestic data. UK retail sales fell 0.5% month-over-month in July against a 0.3% decline expected and a 1.0% increase prior, with annual growth slowing to 1.6% from 4.2% and missing the 2.3% consensus. GBP/USD showed no meaningful reaction and finished higher. When a currency ignores a bad print and rallies anyway, the move is being driven entirely by the other side of the pair.

The yen is the outlier. Japanese August flash PMIs came in firm — manufacturing at 55.1 from 54.7, services at 52.3 from 51.2 — with new orders rising at the fastest pace of the year, supported by a weak currency. Core inflation excluding fresh food rose to 1.8% in July from 1.6%, in line with consensus, held below target by energy subsidies. Pressure on the Bank of Japan to tighten and support the yen is mounting, but with domestic price pressures still modest the decision is not clean. The US Treasury has already intervened in the yen by selling euros, which adds a policy layer to that pair the euro cross does not carry.

For EUR/USD specifically, the broad-based nature of dollar weakness is constructive. A move driven by one pair's fundamentals reverses when those fundamentals shift. A move where the dollar is losing against the franc, the euro, sterling and the commodity currencies simultaneously is a dollar story, and dollar stories persist until the underlying driver changes.

The underlying driver here is the Treasury's balance-sheet management and the fiscal picture behind it. Nothing scheduled before year-end changes that.

What The Published Targets Actually Say

The forecast spread across the sell side is unusually wide, and the width itself is informative.

The near-term consensus clusters between 1.15 and 1.17 for a three-month horizon. One published path has the pair at 1.17 in three months, 1.18 in six and 1.20 over twelve, built on scepticism that the Fed tightens at all this year. Another has 1.15 in three months, 1.17 in six and 1.20 in twelve — the same destination, a slower route. The aggregated survey path reads 1.1493 late 2026, 1.1715 early 2027 and 1.1843 late 2027.

Year-end 2026 targets range from 1.11 to 1.18. The bearish end assumes a stronger dollar on a Fed that eventually hikes and a eurozone that stalls under energy pressure. The bullish end assumes ECB tightening meets a Fed that never moves. The midpoint sits near 1.15 — below where the pair trades today.

That is the important observation. EUR/USD at 1.1710 is already trading above the median year-end forecast. Either the consensus updates or the pair retraces. Several of these targets were constructed before the ECB delivered its first hike since 2023 and before the Fed's hawkish pivot, and the banks that assumed the ECB would hold while the Fed cut are working with fundamentally different inputs today without having refreshed their published numbers.

The more conservative range-bound framing — 1.13 to 1.21 for the remainder of 2026, with no sustained trend absent a clear inflation surprise in either jurisdiction — probably captures the near-term reality better than the directional calls. That range puts Friday's price in the upper third but nowhere near the ceiling.

The structural bull case remains intact across most frameworks: narrowing rate differentials, German fiscal stimulus, and fading dollar exceptionalism. What has changed is the timeline, which keeps getting pushed back.

The immediate technical barrier that every desk has identified is 1.1700. A clean break exposes the higher August levels. A retreat below 1.1600 would suggest the dollar's stabilization is developing into a broader recovery rather than a pause. Those two lines bracket the trade.

EUR/USD Price Forecast: Base, Bull And Bear Into Q4

Base case. The pair consolidates between 1.1644 and 1.1731 over the next two weeks while the overbought readings work off and the market waits for Jackson Hole. This is the highest-probability path: 1.1710 has rejected twice inside twenty-four hours, momentum oscillators are stretched after a 182-pip run in six sessions, and negative divergence signals are emerging. A dip that holds the 1.1631 to 1.1644 band and turns confirms the break of the 200-day. Watch the daily close against 1.1644 as the single cleanest read on control.

Bull case. A daily close above 1.1710 opens the 78.6% retracement at 1.1731, then the April swing high near 1.1843 and the February peak at 1.1830. That path needs three things in sequence: a neutral-to-dovish Jackson Hole keynote on August 28, an ECB hike on September 10, and a Fed hold on September 16. Add a soft US flash PMI Friday afternoon and the dollar index breaking 98.56 decisively, and the euro clears 1.1731 before the weekend. The structural support is real — eurozone composite PMI at a nine-month high, manufacturing at a four-and-a-half year high, hiring returning for the first time this year, and a Treasury actively expanding dollar supply.

Bear case. A hawkish Jackson Hole keynote, or a firm US flash PMI print with manufacturing holding 53.9, sends EUR/USD back through 1.1644 and the 200-day at 1.1631. Below 1.1600 the recovery structure is void and 1.1583 opens, followed by 1.1521. The accelerant would be a Fed hike on September 16 combined with an ECB that hikes once and signals a pause — the divergence trade collapsing into convergence. A sustained Hormuz blockade that pushes European gas higher and cracks the manufacturing recovery gets to the same place by a different road.

What actually decides it. Three variables, in order. The dollar index at 98.56 — that three-month low is the technical floor, and a decisive break removes the last support under the greenback. The 30-year at 5.25% — if the September 9 buyback expansion fails again to hold long yields down, the fiscal credibility trade strengthens and the dollar keeps bleeding regardless of what the Fed does. And the gap between September 10 and September 16, which will either deliver the cleanest policy divergence of the cycle or collapse it entirely.

EUR/USD at 1.1710 has already repriced a Fed hold and an ECB hike. What it has not priced is the possibility that both central banks end up doing exactly one thing and then stopping.

That's TradingNEWS