13/07/2025
EURUSD ON 4H TIMEFRAME
1. US Dollar Weakness (DXY)
If US inflation data (CPI, PPI) shows a decline or is below expectations, it reduces pressure on the Fed to hike further.
The Fed is approaching the end of its tightening cycle, and market participants may be pricing in cuts in coming months (especially if labor market data shows weakness).
If Powell or other Fed officials sound dovish in speeches this week, the dollar could weaken.
🔹 Effect: Weak USD → EUR/USD goes up.
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2. European Central Bank (ECB) Hawkish Tone
Recent ECB commentary has leaned slightly hawkish despite signs of EU economic slowdown. If ECB signals more rate hikes to fight inflation, this can strengthen the euro.
EU inflation data, if sticky or higher than expected, can reinforce this stance.
🔹 Effect: Stronger Euro → EUR/USD goes up.
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3. Economic Surprise Index Divergence
If Eurozone economic data (e.g., PMI, retail sales) starts beating expectations while US data disappoints, markets will favor EUR over USD.
The expectation differential between both economies can shift capital flows in favor of the euro.
🔹 Effect: Positive EU surprises + negative US surprises = bullish EUR/USD.
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4. Risk-On Market Sentiment
A rising stock market globally or a more optimistic macro environment (e.g., reduced geopolitical tensions, positive trade data) can weaken the USD as it's a safe-haven.
Investors shift capital into riskier assets, including the euro.
🔹 Effect: Risk-on sentiment → USD weakens → EUR/USD up.
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⏱ Key Fundamental Events to Watch This Week
Date Event Impact
📅 July 16 US Retail Sales Weak numbers = USD bearish
📅 July 17 Fed Powell Speech Dovish = USD bearish
📅 July 18 EU CPI (final) Sticky inflation = Euro bullish
📅 July 18 US Jobless Claims Higher = USD bearish
