The euro position is now unambiguous by one measure: a net short of 67,504 contracts against open interest of 952,683, ranked at the top of its own six-month range, a level the data explicitly flags as the most stretched since records began on 6 January 2026. The weekly change is not a pause. It grew by 27,132 contracts in the latest reporting week, the opposite of what the desk's 3 July falsifier required to call the squeeze confirmed.
That divergence matters because the rest of the positioning book is telling a different story about the dollar. In the five-year Treasury, the net short shrank by 52,735 contracts in the same week, and in the ten-year the net short shrank by 113,406 contracts, both flagged as short-covering rather than a growing position. If the market genuinely believed the dollar's rate-differential premium was overdone, unwinding dollar-bullish bets should show up on both sides at once, in the rates book and in the currency book. It has only shown up in one.
The euro short is not being squeezed; it is the one corner of the dollar-bull complex that has not yet joined the Treasury unwind.
The tape offers a partial explanation. EUR/USD closed 3 July 2026 at 1.144, up 0.55% on the day and 0.69% over five sessions, but still 1.46% lower over the past month and well short of its 20-day high of 1.161, the exact level the desk named as the line that would confirm the squeeze. The US Dollar Index closed 2 July 2026 at 100.86, down 0.52% on the day and 0.56% over five sessions, yet still up 1.65% over the month and short of its own 20-day low of 99.41. Both instruments are drifting the direction the squeeze thesis wants, without breaking the range that would make it a fact rather than a possibility.
The honest reading is a split verdict rather than a clean one. The Treasury side of the desk's 3 July call is holding: short-covering at both the five-year and ten-year tenor is now two consecutive weekly reports running in the same direction. The currency side is not holding: the euro short's extension to a fresh high in its stretch ranking is the opposite of confirmation. Positioning data lags price by up to a week under this reporting schedule, which is the weakest link in reading this report as decisive either way; a currency desk could already be repricing ahead of what the next report shows.
What the desk watches next is concrete. The ISM Services PMI lands 06 Jul 2026 with a forecast of 54.2 against a previous reading of 54.5, a release that speaks directly to the same growth narrative underpinning the dollar's rate premium. The FOMC Meeting Minutes follow on 08 Jul 2026, and the Official Cash Rate decision in New Zealand, forecast to move from 2.25% to 2.50%, lands the same day and will test risk appetite in the crosses that trade alongside the euro. If EUR/USD clears 1.161 on rising volume, or the next Commitments of Traders report shows the euro short actually shrinking, the squeeze case graduates from partial to confirmed. If the euro short extends again while Treasury shorts keep covering, the split stands, and the desk treats the euro as the one asset where the dollar's supply-side unwind has not yet arrived.
