Many hope that once quarter-end is passed, new things will become possible—for example, a turnaround. A lot of people seem to be waiting for that, hoping to re-activate their short dollar views.
Perhaps once European vaccinations finally pick up the pace and the market gets bored with the US fiscal story or Treasuries catch a bid. Still, the risk remains that quarter-end and Easter deliver no change of trend. If so, that could trigger many investors into giving up on any remaining weak dollar views.
I’ve been waiting patiently for the market to take me out of EUR/USD shorts, still, the more I keep looking at 2 % UST’s, EUR/USD at 1.1500 and at $1500, who knows my FX contrarian views entering 2021 might soon become the consensus trade.