There was plenty of data and US-based event risk this past week to suggest to the casual observer that the dollar was running on its own fundamental strength.
The euro saw its sharpest two-day decline since the height of the financial crisis, highlighting a potential sentiment extreme as leveraged positions hit multi-year highs.
The British pound struggled to maintain the rebound from the May low on Friday, and the sterling is certainly at risk of facing additional selling pressures in the following week as currency traders turn their attention to the Bank of England's quarterly inflation report.
Several technical indicators are at high risk levels raising the possibility of large scale risk on asset liquidations so Clive Corcoran will be standing aside on US equities until the FX/commodities backdrop becomes more transparent.
DBV, which acts as an ETF proxy for the FX carry trade, appears to have stalled at the top of its rebound from the Japanese selling climax in late March.
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