Is the EUR due a correction?EUR/USDOANDA:EURUSDlewulbToday I will be going into the Fundamental Analysis behind why I think the EURUSD is ready for a rebalance. As we have seen all through Q1-Q3 of this year Bullish runs towards 1.25; this is what the ECB are currently wanting for the EUR. The DXY is now nearing over extension on Bears, this comes as the DXY had been setting up a Market Maker Sell Model since October 2001. Lets get stuck into the Fundamentals and Macro Economic data behind why I believe we are now due a correction. As we enter Q4 growth remains more resilient than in other developed economies, with Q2 GDP revised up to 3.8% annualised, while unemployment holds around 4.2%. Inflation has eased from its peaks, but core PCE remains at 2.9% year-on-year and continues to print around 0.3% month-on-month. That is not the inflation profile of an economy returning quickly to the Federal Reserve’s 2% target. For the Fed, this means less freedom to cut aggressively, even though the market had hoped for a deeper easing cycle. The result has been a repricing of expectations: investors are now looking for less than 40bps of cuts by year-end, down from over 75bps earlier in the summer. That repricing has slowed dollar weakness, and if inflation proves sticky through the next few prints, it may force the Fed to hold policy tighter for longer, which supports the dollar. Yields continue to provide an advantage. The U.S. two-year Treasury trades near 3.6%, while the German equivalent is closer to 2.7%, keeping a spread of roughly 90bps in the dollar’s favour. That premium is significant in a global environment where capital searches for relative yield. Unless inflation falls sharply or the growth outlook in the U.S. deteriorates meaningfully, investors have little reason to abandon dollar assets. At the same time, U.S. M2 money supply has resumed growth, up nearly 5% year-on-year to about $22.2 trillion. While velocity remains subdued, the resumption of money growth carries the risk of keeping inflation more persistent than markets would prefer. A central bank facing that backdrop cannot ease quickly, which again leaves policy tilted toward dollar strength Seasonality provides an additional layer of support. Historically, the dollar tends to strengthen into the final quarter of the year, particularly against the euro, where autumn often brings weakness. While seasonality is not a driver on its own, it reinforces the broader narrative by suggesting that USD rallies in Q4 have a tendency to persist. The euro, however, is not without potential upside incentives. A material hawkish surprise from the ECB, such as firmer guidance or hints at additional tightening, could compress the yield spread. Upside surprises in Eurozone inflation or growth data, especially PMIs and CPI, could narrow the gap with the U.S. economy. A sharp deterioration in U.S. data (weaker payrolls, falling consumption, or a faster decline in inflation) could also undermine the dollar. These are the conditions under which EUR/USD could break higher and challenge the bearish bias. For now, the base case remains a firm dollar into year-end. Inflation is sticky, U.S. growth is stronger, yields remain higher, money supply growth risks keeping inflation alive, positioning still favours USD upside, and seasonality supports the pattern. The reversal triggers are clear: Core PCE must fall convincingly below 2.5%, unemployment must rise above 5%, or Eurozone data must deliver a genuine positive surprise. Short of that, the dollar remains the currency with the strongest foundation going into Q4. Stop going into these markets blind; read the data. Let me know your guys' opinion on the matter.