Euro closes below 1.1215 as the pressure on French debt returns

EUR/USD closed Wednesday's session at 1.1196 on our feed, its first close below 1.1215 since our weekly wrap set that level as the test. Most of the drop came at the London open, hours before the Fed minutes, on a day when French bonds sold off again after a single day of relief, the US 10-year yield touched 5.35% and Brent climbed back above $100. Gold fell to its lowest since early August.

The euro breaks the wrap's line

• EUR/USD closed at 1.1196 on our feed, down 0.55% from Tuesday's 1.1259. Most of that came between 07:00 and 08:00 UTC, when the pair went from about 1.1228 to 1.1190; between the Fed minutes at 18:00 UTC and the close it barely moved. FXStreet had it near its lowest level in 17 months.

• The session low was 1.1165 at 12:27 UTC, below the 1.1185 that Action Forex had named as its downside target, though the pair closed back above it and stayed above Monday's 1.1161 low.

• Action Forex said the relief in French bonds lasted one day: the gap between French and German 10-year yields widened back toward 137 basis points, and the euro went from the strongest major to the weakest in a single session. After the close, FXStreet reported Bank of France Governor Moulin saying the strain in French bonds was serious but did not meet the conditions for help from the European Central Bank (ECB).

• Against the pound the euro fell for a ninth straight session, to a close of 0.8473 on our feed after a low of 0.8448, a 16-month low by FXStreet's count. EUR/JPY gave back Tuesday's rebound, closing at 176.96.

The dollar, yields and the Fed minutes

• The Federal Reserve released the minutes of its 15-16 September meeting. Every participant supported the 25 basis point hike, and most considered that another increase would probably be appropriate by the end of the year, FXStreet reported; at that meeting, officials saw inflation risks worsening. The minutes describe a meeting held before September's payrolls report, as investingLive's preview, cited in our weekly wrap, noted.

• The US 10-year Treasury yield touched 5.35%, its highest since April 2002, FXStreet said, above the 5.33% our weekly wrap recorded. A $39 billion 10-year auction sold at 5.300%, below the 5.317% the market had priced before it, investingLive reported.

• Ahead of the minutes, Action Forex had the dollar stronger against all seven majors, with the dollar index at 102.401, up 0.55%. Investing.com had it near 18-month highs after the release.

• GBP/USD closed at 1.3213 on our feed, as 30-year gilt yields topped 6%, FXStreet said; after the close it added that every session's low since 24 September had sat within half a cent of 1.3200, and Wednesday made it ten in a row; our feed agrees. USD/CHF rose for a third straight session to 0.8333, USD/CAD gained 0.34% to 1.4256 and USD/JPY ended flat at 158.07.

Gold and oil

• Gold fell to $4,066 at 12:51 UTC on our feed, its lowest since early August and through the $4,104 two-month low FXStreet had flagged that morning, and closed at $4,101. It also dipped below the $4,095 that Société Générale had named as an interim target, a break of which it said would open the way to $4,000, but closed above it; its high, $4,170, stayed below the $4,200 area that turned it back three days running last week. FXStreet said gold's failure at the 200-day moving average put $3,940 in play.

• Brent was back above $100 after Iran stepped up attacks on tankers in the Strait of Hormuz, FXStreet said. Action Forex put Tuesday's low at $97.07. WTI, by contrast, gave up its earlier gains by the evening as Middle East exports recovered and the dollar firmed, FXStreet said.

Market gauges and what's next

Our proprietary metrics at the close of the session:

• Readings: an MRS of 69, a CTS of 54 with its carry backdrop at 60, and an FSI of 59, Neutral, all three unchanged from Tuesday.

• Top of our strength table: the euro, on top for 273 of the session's 1,439 minutes, 19% of them, ahead of the yen on 225: its third time on top in four sessions.

• Bottom: the US dollar, last in the table for 20% of the minutes.

• The dollar: stronger against every major before the minutes by Action Forex's count, yet the currency that spent the most minutes at the bottom of our table, while the euro led it on a day it lost 0.55%. The table counts minutes in each place, not the session's net move, so a currency can spend much of a session at the bottom and still finish it higher.

• Last week's test: after holding for two sessions, EUR/USD closed below 1.1215, the level our weekly wrap set. The wrap said that if it did, the euro's slide would be running on yields, energy and France rather than on the Fed's calendar, and Wednesday's drop came before the minutes.

Still ahead: FOMC member Waller speaks at 08:30 UTC and Bank of England Governor Bailey at 12:15 UTC, ahead of US weekly jobless claims at 12:30 UTC (forecast 200,000, previous 197,000). Our weekly wrap also flagged Canada's jobs report on Friday.