The Treasury side of the dollar-bull unwind is confirmed by two straight weeks of short-covering at the five and ten year tenor, but the euro short itself extended to its most stretched level since data began on 6 January 2026, so the squeeze the desk flagged on 3 July 2026 remains a partial, not a confirmed, read.

What would prove it wrong

If EUR/USD clears its 20-day high near 1.161 on rising volume or the next Commitments of Traders report shows the euro net short actually shrinking, treat the squeeze as confirmed; if the euro short extends again while Treasury shorts keep covering, treat the split as intact and the currency leg as the one still exposed.

Status

Next tested

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This is the desk’s own dated record, settled against market data. Descriptive of a research thesis, not investment advice.