The trade for the past month has been to short the US dollar as taper expectations extend to March 2014 and beyond. Where did the money flow? Into aussie and pound longs, especially.

What’s the biggest risk to that trade? The Fed hinting that it will taper before March 2014. What pairs are doing the worst today? AUD/USD and GBP/USD which is a reflection of how crowded those trades got over the past month. We would have a better idea if the CFTC had been publishing data.

What’s next? The Fed is still 24 hours away so this move has time to run, especially if we start to hear more rumblings about the potential for a Fed that doesn’t want to wait forever to taper.