The fact that the Fed managed to convince markets that they can stick with the narrative of higher rates for longer is a win in itself for the dollar. I mean, if you look elsewhere, the case is definitely less compelling for the likes of the ECB and BOE should the latter also choose to do so later today.
But when you throw in a breakout higher in Treasury yields, there is added conviction for dollar bulls to try and build the next upside leg.
Right now, EUR/USD is pushed down to test the May low of 1.0635 once again after having done so earlier this month. A break below that will solidify a further upside momentum in the dollar, with there being little in the way of a drop towards the February and March lows next and then potentially the 1.0500 mark.
The dollar is in the driver's seat at the moment as if the bond market continues to sell off further, the greenback will remain underpinned until something changes in the narrative.
