EUR/USD targets 1.0900 as dollar faces multiple headwinds

EUR/USD advanced to 1.0875, gaining 0.4% as the US dollar faced pressure from multiple fronts including fiscal concerns, potential Fed policy shifts, and technical breakdown. The dollar index dropped below the crucial 104.00 support level, triggering additional selling pressure across major pairs. European economic data showed surprising resilience, with German business confidence improving for the third consecutive month. Markets are pricing in a 75% probability of a Fed rate cut by September, while ECB officials maintain a hawkish stance on inflation. Technical momentum indicators favor further euro gains, with the MACD showing bullish divergence and the 20-day moving average providing dynamic support at 1.0840. Resistance levels stand at 1.0900 and 1.0935. The confluence of dollar weakness and improving European fundamentals suggests continued upside potential for EUR/USD in the near term.