Consensus is very strong when it comes to the dollar about to crash further. One of the biggest themes in 2020 has been the narratives that got too complacent and suddenly reversed out of nowhere. P/l frustration has been huge in those trades.
DXY attempting some sort of hammer candle. It has worked before as short term reversals after extended moves, just like we saw in early Sep. On highs, a candle is called a hanging man, and we saw how it played out in March.
Dollar positioning remains rather short, despite the last little move higher in shorts covering (chart 2).
Imagine the p/l pain should the DXY start to bounce from here, if nothing else a short term bounce, just when everyone saw the break down occurring today.