There it is.
AUD/USD returned to 0.7840 after falling as low as 0.7625 a few hours ago in a post-RBA selloff. It would be nice to credit the strength of the Australian dollar but it’s really a dollar driven move.
This is a pure squeeze, in my opinion.
The five most-popular positions in markets are:
- Long USD
- Short oil
- Long gold
- Short euro
- Long bonds
All of them are taking a pounding today and the market is puking. Short squeezes can be a nasty piece of business.
There is no great rule of trading a squeeze. It’s hard to tell when it will end but with the euro flirting with 1.1500; Greg notes a technical level to watch.
Even the strongest hands get squeezed from time to time
