Hi guys,
Can someone please help me understand this concept more.
I understand that a currency will generally have the same momentum across the board against all other currencies. Eg. If there’s a huge bearish move with the eur/usd, then it’s likely the aud/usd will be also experiencing the same, also the jpy/usd. This is from my understanding, something in the fundamentals gave the USD something to rally for.
My specific question is this…
How does it work with trading currencies, eg. if you are going short on the eur/usd, is this SELLING the euro while BUYING the USD?
Therefore, the euro across the board against all other currencies will turn bearish, while the USD across the board against all other currencies rally? (This is assuming a very large group of trades by the big banks and market makers).
Do I have this completely correct or is there more to it?