EUR/USD surges above 1.19 as USD slumps on US political turmoil

• Greenback weakens on reports of Flynn looking to testify against Trump.
• DXY plummets to 92.56, US 10-year T-bond drops more than 3%.
• Dow Jones and S&P 500 down 1%.

The EUR/USD pair surged higher and added more than 50-pips in a matter of minutes and broke above the 1.19 mark after the USD came under a heavy pressure amid escalating political tension in the United States. As of writing, the pair was trading at 1.1922, up 0.16% on the day.

Earlier today, Michael Flynn, Trump's ex-national security adviser, pleaded guilty to lying to the FBI about talking to Russia's ambassador post-election and turned himself to be taken in for a plea hearing. Brian Ross of ABC News claimed that Flynn would testify against President Trump as he tweeted out, "Michael Flynn promised "full cooperation to the Mueller team" and is prepared to testify that as a candidate, Donald Trump "directed him to make contact with the Russians." 

The US Dollar Index, which was consolidating its daily gains above the 93 mark ahead of the news, fell sharply to its lowest level since Monday at 92.56 and was last seen at 92.65, down 0.34% on the day. The negative market sentiment weighed on risk-sensitive assets as well. As of writing, the Dow Jones Industrial Average was losing nearly 1% while the S&P 500 was down 1.05%. Meanwhile, the 10-year US Treasury-bond yield is now losing 3.5% at 2.329%.

Technical levels to consider

The pair could encounter the immediate resistance at 1.1960 (Nov. 27 high) ahead of 1.2000 (psychological level) and 1.2090 (Sep. 8 high). On the downside, supports align at 1.1900 (psychological level), 1.1805 (100-DMA) and 1.1715 (Nov. 32 low).