Hedge Funds Ramp up EURUSD Short... Momentum Changer?
The chart above, based on CFTC data from non-Commercial Speculators, indicates that there might be a time-lag between Hedgie shorts and EURUSD levels. Very interesting indeed, especially when you consider that it points to an ER of around 1.2 if the correlation were to hold up.
Important to note, though, that past correlation does not imply causation or even future correlation without argument. The sheer weight of ECB and Fed pressure in the opposite direction may well render this chart, as compelling as it may be, meaningless as there has never been a more important truism in the market right now:
"Never Fight the Fed" (or in this case the ECB)
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