Fundamental Market Analysis for October 6, 2026 EURUSDEuro/US DollarSAXO:EURUSDFresh-Forexcast2004France's fiscal risks remain the main source of weakness for the euro. Rising borrowing costs and political disagreements complicate deficit reduction, while announced early elections in Spain add uncertainty. For the single currency, this means that rising European bond yields currently reflect primarily an increase in risk rather than improved asset attractiveness. In the US, yesterday's ISM report showed a slowdown in services sector growth but simultaneously heightened inflation concerns: the Purchasing Managers' Index rose to 74 from 72.6. Weak employment data reduced expectations for an October Fed rate hike, yet price pressures continue to justify further tightening. High US bond yields continue to support the dollar. Today, Eurozone retail sales will test the resilience of consumer demand. A strong result could support the euro, but alone it would not eliminate budget risks. Much of the negative backdrop is already priced in, so the potential for new sales is moderate. As long as debt tensions persist, the base case for EUR/USD remains downward. Trade idea: SELL 1.12200, SL 1.12500, TP 1.11450