EUR/USD: Dollar Dominance Report — April 27, 2026 [RISK ON]

REGIME: The current regime is BULLISH for EUR/USD, driven by the Alphameter score of +31/100, which indicates a RISK-ON environment where the DXY strength is inverted, suggesting dollar weakness and a tailwind for EUR/USD, with the asset averaging +8.1%/yr in neutral regimes, but now benefiting from the risk-on sentiment. SENTIMENT DRIVER: The most important headline catalyst is the FOMC Rate Decision, as it will influence the dollar's strength and capital rotation, with a potential dovish tone from the Fed causing investors to rotate out of safe-haven dollars and into risk-on euros, thereby supporting the EUR/USD price. ANALYSIS: Through the "Dollar Dominance Report" lens, the current DXY weakness is a positive sign for EUR/USD, as it suggests capital is rotating out of safe-haven dollars and into risk-on euros, which is consistent with the Alphameter's RISK-ON signal, and historically, EUR/USD has averaged +8.1%/yr in neutral regimes, but the current risk-on environment may lead to outperformance, with the 7d change of -0.6% and 30d change of +1.8% indicating a recent uptrend, and the price being 0.3% above the 200-day SMA, further supporting the bullish case. RISK FACTORS: Two specific catalysts that could flip the signal BEARISH for EUR/USD are a surprise hawkish tone from the FOMC, causing the dollar to strengthen above 105, and a significant upward revision to the Core PCE Price Index above 0.5%, which would lead to a sharp increase in dollar demand and a subsequent decline in EUR/USD. WATCH: The 2026-04-29 FOMC Rate Decision is a key event to watch, as it will provide insight into the Fed's monetary policy stance and its potential impact on the dollar's strength and capital rotation, which will be crucial in determining the near-term direction of EUR/USD.