EUR/USD, GBP/USD rally as dollar weakness accelerates across major pairs

The US dollar is experiencing broad-based selling pressure, with EUR/USD advancing 0.4% to 1.0890 and GBP/USD climbing 0.5% to 1.2750 in early trading. USD/JPY has declined sharply by 80 pips to 154.70, while USD/CHF dropped to 0.9120, marking a significant reversal in dollar strength. The weakness stems from growing concerns about US fiscal sustainability and shifting Federal Reserve rate expectations, with markets now pricing in earlier rate cuts for 2026. Technical analysis reveals EUR/USD has broken above key resistance at 1.0875, targeting the 1.0920 level, while GBP/USD eyes the psychological 1.2800 barrier. USD/JPY's breakdown below 155.00 signals potential continuation toward 154.00 support. The dollar index has fallen below its 50-day moving average at 106.80, suggesting further downside momentum as traders reassess the greenback's dominance amid mounting domestic challenges.