The US dollar is moving higher against the major currencies as Treasury yields rise. The fundamental story starts with the Fed: traders are increasingly considering the possibility that last week’s rate hike will not be the last.Today’s flash S&P Global US composite PMI jumped to 58.4 from 56.0 in August, its highest reading since July 2021. Services led the advance, manufacturing output improved, and hiring strengthened. That points to an economy that is still moving forward. However, backlogs and supply delays also increased, while businesses reported higher input costs. Strong growth gives the Fed room to raise rates again; continued price pressure gives it a reason to consider doing so. (hk.marketscreener.com)Fed officials have been delivering a similar message. Richmond Fed President Tom Barkin said yesterday that inflation risks outweigh employment risks and that the economy may be firming. Boston Fed President Susan Collins supported last week’s hike and said more restrictive policy is needed to bring inflation back to 2%. Chicago Fed President Austan Goolsbee has warned that strong demand may be adding to the price pressure from energy and other supply shocks. (www.richmondfed.org)Fed Governor Michael Barr, a voting member of the FOMC, added to that message today. He said the Fed had been “out of position” before last week’s hike and that further policy adjustments will likely be needed in his base case. Growth is strong and the labor market is solid, he said, but inflation is not clearly returning to 2% quickly enough. (www.federalreserve.gov)The market now sees about a 64% chance of a hike at the October meeting, up from around 50% yesterday. That repricing helps explain the move higher in Treasury yields—and in the dollar. The Fed meets on October 27–28, ahead of the November elections. President Trump has called for lower rates and criticized last week’s hike. (Meeting calendars and information)Why do higher yields help the dollar?For a currency trader, yields are part of the return from holding one currency instead of another. If US yields rise relative to yields elsewhere, dollar-denominated assets can become more attractive. Investors seeking that return may need to buy dollars, adding support to the currency.That relationship is useful, but it is not a trading signal by itself. Yields can rise while a currency pair struggles to break a technical level. At other times, the dollar can move before yields do. The news helps explain the pressure; the price action shows where buyers and sellers are actually taking control.That is what I focus on in the video above. I take a technical look at EURUSD, USDJPY, GBPUSD, USDCHF and USDCAD, identifying the levels that define the near-term bias, where traders can measure their risk, and the next targets if the dollar’s move continues.Remember that a stronger dollar generally pushes EURUSD and GBPUSD lower, while it pushes USDJPY, USDCHF and USDCAD higher. The direction is easy to mix up when the dollar appears on different sides of a currency pair. The video walks through each chart so you can see what the dollar’s strength means for that pair—and what price would need to do to challenge the current move.Some quick notes for each: EURUSD: The EURUSD fell below the next targets at 1.1419 and 1.14072. On the downside traders would not look toward 1.1377 and 1.13634 followed by the July low price at 1.13525. The low price from June bottomed at 1.13243. Close risk could be looked at at 1.1419. Stay below and the sellers are in firm control.USDJPY: The USDJPY moved above a key swing area target at 157.90 up to 158.04. The 200 day moving average at 158.433 is next key target. Get above that longer-term moving average and the bias shifts even more in favor of the buyers. Recall however that the Bank of Japan checked rates on Friday after the price moved up to the 158.045 area. So caution must be maintained.GBPUSD: The GBPUSD moved below the July low price at 1.32729. That level is now a close risk level for traders in addition to 1.3303, and a more important swing area between 1.3321 and 1.3340. On the downside, there is a lot of support until around the 1.3218 level followed by a swing area down to 1.3171 and 1.3181.USDCHF. The price of the USDCHF moved above its 100 hour moving average at 0.82237, and based against that level before moving to new session highs near 0.8750. The 0.8237 is now close risk. If the price stays above that moving average, the buyers are in firm control with the high price for the year at 0.8262 as the next target. That level is the highest level going back to the end of May 2025. Another key support level is at 0.82116 which is the 38.2% retracement of the trading range since the 2025 January high price. This article was written by Greg Michalowski at investinglive.com.