EUR/USD spent most of the week riding a softer dollar story, before late-week research began flagging reasons for caution.
Early in the window, published analysis leaned constructively on the euro: positioning data showed asset managers accumulating euro contracts while speculators stayed underweight, and one-month risk reversals flipped in favor of euro calls for the first time since February. Analysts tied dollar softness to weaker US data, fiscal credibility concerns, and a re-rating of Fed expectations heading into Jackson Hole. Near-term targets cited included 1.17 by end-September and 1.18 by year-end, with technical support flagged around 1.1650.
By the second half of the week, the tone grew more mixed. Some researchers argued surging European gas prices and policy divergence still favored the euro, while a contrarian thread pointed to Europe's inflation-plus-weak-growth risk and a hawkish Fed tilt driving a short-term dollar bounce — though medium-term dollar weakness was still expected to reassert.