Overall speculative traders’ positioning on the CME, according to CFTC data, is short USD. It isn’t a huge position and of course, this is a snapshot of only one part of the market, but it’s fair to say that positions are not a barrier to stronger US data and higher US Treasury yields dragging the Dollar even higher in the weeks ahead.

EUR/USD positions are clearly still long EUR. Given that the longs are facing adverse rate trends, domestic and international (especially Chinese) growth concerns, the threat of capitulation dragging EUR/USD closer to parity can’t be ignored. 

Throw in the danger that a spike higher in Treasury yields sends USD/JPY above 150, and the arguments against fighting the Dollar rally here seem clear enough.