USD weakens as markets price 2026 rate cuts; key levels tested

The US Dollar has experienced deepening weakness across major pairs as markets increasingly price in Federal Reserve rate cuts for early 2026. EUR/USD has benefited from the dollar's broad decline, while USD/JPY faces downward pressure as safe-haven demand supports the yen. Market participants are reassessing the Fed's monetary policy trajectory, with futures markets now indicating higher probability of easing by 2026. This shift in rate expectations has triggered significant dollar selling, pushing key currency pairs toward critical technical levels. Oil markets are also reacting, with both Brent and WTI futures showing volatility as dollar weakness typically supports commodity prices. Technical analysis reveals major support and resistance levels are being tested across multiple pairs, creating potential breakout opportunities. The evolving rate cut narrative could continue pressuring the dollar if upcoming economic data reinforces expectations for future Fed easing, making these technical levels crucial for near-term direction.