The commitments of traders reports showed that speculative longs in euro/dollar were at their highest levels since early November.
Remember early November? The Fed had just officially launched QE2 and the market was so bearish on the dollar it couldn’t see straight.
What happened over the next few months? A decline from 1.4280 to 1.2860.
Granted, you had a second sovereign debt crisis breakout at the time, but should the events in North Africa spread and morph, we could see a similar scenario play out.
