Barclays: Month-end model signals moderate USD selling, weak bias on EUR/USD

Barclays’ proprietary rebalancing mannequin suggests average USD promoting into June month-end, although indicators for EUR/USD stay weak, implying restricted assist for a pointy euro rally from rebalancing flows.

Key Factors:

• Month-Finish Outlook:
  Mannequin indicators average USD promoting strain throughout most G10 pairs into month-end, although the EUR/USD sign is weak, suggesting solely marginal assist from flows.

• Quarter-Finish Perception:
  On the quarter-end, the mannequin reveals stronger dollar-selling strain, once more with solely a weak EUR/USD sign however a average promoting sign on USD/JPY.

• Implication for EUR/USD:
  Regardless of normal USD promoting pressures, EUR/USD might not profit meaningfully, reinforcing the theme of euro underperformance relative to different majors.

Conclusion:

Whereas positioning changes might strain the USD modestly, EUR/USD upside from month-end rebalancing flows seems restricted. Buyers might look to different G10 pairs for clearer USD-selling alternatives.

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