EUR/USD: Dollar Dominance Report — August 17, 2026 [RISK ON]

REGIME: The current Alphameter reading of 0/100 indicates a RISK-ON environment, driven by the contrarian and trend signals, including the inverted DXY, which suggests dollar weakness is contributing to the higher risk-on score, supporting a BULLISH verdict for EUR/USD. SENTIMENT DRIVER: The absence of specific headlines today means the key indicator of DXY strength is the primary sentiment driver, as a falling dollar directly contributes to a higher risk-on score, which in turn supports EUR/USD price action, with the currency pair gaining 1.3% over the past 30 days. ANALYSIS: Through the "Dollar Dominance Report" lens, the current DXY weakness is driving capital out of safe haven dollars and into risk-on euros, as evidenced by the EUR/USD price action, which is 0.4% below its 200-day SMA but has gained 1.3% over the past 30 days, consistent with the backtest data showing EUR/USD gains of 3.1%/yr in risk-on episodes, driven by dollar weakness, and the fact that the Alphameter's inverted DXY signal is a core component of its risk-on score calculation, with a falling dollar directly contributing to a higher risk-on score, which in turn supports EUR/USD price action. RISK FACTORS: Two specific catalysts that could flip the signal BEARISH for EUR/USD are a DXY breakout above 95, which would indicate a shift in capital rotation back into safe haven dollars, and a 200-day SMA crossover to the downside, which would suggest a trend reversal, with the latter potentially occurring if EUR/USD price action falls below 1.12, a key support level. WATCH: The upcoming ECB Interest Rate Decision on March 12, 2024, will be closely watched, as any surprise change in interest rates or forward guidance could impact EUR/USD price action and influence the Alphameter's risk-on score, potentially altering the current BULLISH verdict.