Base case for the week
EUR/USD is primarily driven by relative rate expectations, macro surprises, and changes in dollar strength.
The most practical weekly framework is to assume the current trend remains intact unless one of the main catalysts changes materially. Traders should focus on confirmation, not prediction.
Bullish path
EUR/USD strengthens if momentum stays aligned with its primary drivers, especially when ecb vs fed expectations and us dollar strengthcontinue to support the same direction.
Bearish path
The weekly outlook weakens when the market narrative flips quickly, positioning gets crowded, or one of the headline catalysts loses support and forces a fast repricing.
What would invalidate the thesis
- A clear deterioration in ecb vs fed expectations
- A clear deterioration in us dollar strength
- A clear deterioration in inflation surprises