An number of the custodial banks, the firms that do the bookkeeping for fund managers, pension plans, insurance companies and the like, report flows into EUR last week from the dollar. These reports run counter to news that speculative short position are building in the euro. It is the old “smart money” versus “hot money” conundrum.
All things being equal (and they rarely are), I’d bank on the smart money rather than the hot money.
EUR/USD is consolidating its rebound at 1.2645 level as US shares dip from intraday highs. They now trade firmer by 3/4%.