Weekly Market Review | October 5–11, 2026
1. Market Overview
EUR/USD remained under significant selling pressure throughout the week. Despite repeated attempts to recover, the market continued to form deep corrections at progressively lower price levels.
My primary scenario remains focused on monitoring US equity market optimism and the possibility of a shift in the prevailing market narrative, particularly in the context of the European political and energy crisis.
At this stage, I see no convincing evidence of a fundamental shift in the US economic outlook. The US economy remains relatively strong, and I do not expect an extended downward move in EUR/USD without a clearer corrective phase.
2. Fundamental Analysis
The key question remains whether the current weakness in EUR/USD reflects a broader deterioration in the US economic outlook or is primarily driven by developments in Europe.
My current assessment favors the second explanation. The European crisis may continue to exert pressure on the euro without necessarily implying a fundamental deterioration in the US economy.
US equity market performance remains an important factor to monitor. Continued optimism in equities could influence risk sentiment and contribute to a change in the prevailing market dynamics.
During the reporting week, the Treasury auction, FOMC minutes and initial jobless claims did not lead me to identify a convincing shift in the prevailing narrative.
However, the absence of a clear shift does not guarantee an immediate recovery in EUR/USD. Price action remains aggressive, and the market has repeatedly demonstrated its ability to extend declines before entering deeper corrective phases.
3. Technical Outlook
The market has developed another expansion pattern similar to the previous Friday's structure, characterized by a deep correction followed by renewed movement at lower price levels.
This is an important distinction: deep corrections may indicate active buying interest, but they do not independently confirm a sustained reversal.
The repeated corrective phases suggest that the probability of uninterrupted downside movement may be decreasing. Nevertheless, buyers have yet to establish a sufficiently clear structure to confirm a lasting change in direction.
My focus remains on identifying whether the current consolidation develops into a stronger recovery or becomes another temporary correction within the broader downward movement.
4. Risk Management and Trading Approach
The reporting week reinforced the importance of remaining flexible when technical patterns repeatedly fail to develop as expected.
My approach is to avoid treating every deep correction as definitive evidence of a reversal. Market behavior must be evaluated alongside the fundamental narrative and the reaction to incoming economic data.
Position management remains particularly important in these conditions. If selling pressure continues, a more conservative approach is required, with reduced trading activity and smaller position sizes.
I will continue to prioritize capital preservation and avoid increasing exposure solely because the market has moved further against the prevailing position.
5. Outlook for October 12–18
I expect the market to attempt a corrective move, although the timing and magnitude remain uncertain. Trading activity should remain conservative until the market provides clearer evidence of directional intent.
The main factors to monitor next week are:
- US inflation: CPI and PPI releases.
- US labor market: Initial Jobless Claims.
- Consumer demand: Retail Sales.
- Energy markets: Changes in oil prices and their potential implications for the broader macroeconomic environment.
- US Treasury market: Developments in Treasury yields.
- European political and energy crisis: Any developments that could materially change the outlook for the euro.
These factors will help determine whether the current EUR/USD weakness remains primarily driven by European developments or begins to reflect a broader shift in the global economic narrative.
My base case remains cautious: I am looking for a corrective phase rather than assuming an immediate, sustained recovery. If the decline continues, I will reduce trading activity and adopt a more conservative approach until the market structure becomes clearer.
1. Market Overview
EUR/USD remained under significant selling pressure throughout the week. Despite repeated attempts to recover, the market continued to form deep corrections at progressively lower price levels.
My primary scenario remains focused on monitoring US equity market optimism and the possibility of a shift in the prevailing market narrative, particularly in the context of the European political and energy crisis.
At this stage, I see no convincing evidence of a fundamental shift in the US economic outlook. The US economy remains relatively strong, and I do not expect an extended downward move in EUR/USD without a clearer corrective phase.
2. Fundamental Analysis
The key question remains whether the current weakness in EUR/USD reflects a broader deterioration in the US economic outlook or is primarily driven by developments in Europe.
My current assessment favors the second explanation. The European crisis may continue to exert pressure on the euro without necessarily implying a fundamental deterioration in the US economy.
US equity market performance remains an important factor to monitor. Continued optimism in equities could influence risk sentiment and contribute to a change in the prevailing market dynamics.
During the reporting week, the Treasury auction, FOMC minutes and initial jobless claims did not lead me to identify a convincing shift in the prevailing narrative.
However, the absence of a clear shift does not guarantee an immediate recovery in EUR/USD. Price action remains aggressive, and the market has repeatedly demonstrated its ability to extend declines before entering deeper corrective phases.
3. Technical Outlook
The market has developed another expansion pattern similar to the previous Friday's structure, characterized by a deep correction followed by renewed movement at lower price levels.
This is an important distinction: deep corrections may indicate active buying interest, but they do not independently confirm a sustained reversal.
The repeated corrective phases suggest that the probability of uninterrupted downside movement may be decreasing. Nevertheless, buyers have yet to establish a sufficiently clear structure to confirm a lasting change in direction.
My focus remains on identifying whether the current consolidation develops into a stronger recovery or becomes another temporary correction within the broader downward movement.
4. Risk Management and Trading Approach
The reporting week reinforced the importance of remaining flexible when technical patterns repeatedly fail to develop as expected.
My approach is to avoid treating every deep correction as definitive evidence of a reversal. Market behavior must be evaluated alongside the fundamental narrative and the reaction to incoming economic data.
Position management remains particularly important in these conditions. If selling pressure continues, a more conservative approach is required, with reduced trading activity and smaller position sizes.
I will continue to prioritize capital preservation and avoid increasing exposure solely because the market has moved further against the prevailing position.
5. Outlook for October 12–18
I expect the market to attempt a corrective move, although the timing and magnitude remain uncertain. Trading activity should remain conservative until the market provides clearer evidence of directional intent.
The main factors to monitor next week are:
- US inflation: CPI and PPI releases.
- US labor market: Initial Jobless Claims.
- Consumer demand: Retail Sales.
- Energy markets: Changes in oil prices and their potential implications for the broader macroeconomic environment.
- US Treasury market: Developments in Treasury yields.
- European political and energy crisis: Any developments that could materially change the outlook for the euro.
These factors will help determine whether the current EUR/USD weakness remains primarily driven by European developments or begins to reflect a broader shift in the global economic narrative.
My base case remains cautious: I am looking for a corrective phase rather than assuming an immediate, sustained recovery. If the decline continues, I will reduce trading activity and adopt a more conservative approach until the market structure becomes clearer.
