DislikedThe OP was obviously trying to sound smart by blatantly ripping off someone else's analysis. There is no such thing as a short squeeze in FX.
I do understand options, as I need it for work every day. Most options traders are constantly hedging their deltas, and I know how this works. All I'm saying is that calling every strong up move a "short squeeze" is misleading. It tends to paint this "omg, there is no supply" kind of picture.Ignored
In my view, short squeezes definitely exist in both the spot and options market, albeit with different characteristics from those seen in the equity or commodity markets, when there could, in theory at least, actually be a shortage of the underlying asset available to cover short positions.
However, the dynamics on the underlying price action are the same, in my opinion, in that participants rush to cover losing positions or square newly formed deltas before price moves further against them. This invariably has the effect of pushing up the price further and, in some cases, creating a degree of panic.
In the options market, we sometimes see a short squeeze on implied volatility (which obviously isn't a tangible asset), as a news event could, for example, cause implied vol in EURUSD options to jump up by 3 figures. This would lead to a portion of market makers, whose books are short vega, to hurriedly buy volatility in the market, which thereby has the effect of pushing up the price of implied volatility further as buyers of volatility far outweigh sellers.
Much like you, I also have a problem with posters on these forums completely attributing big moves to a "short squeeze", a giant "stop hunt" or "big boy manipulation". This is a dangerous type of thinking for a trader to assume.
Anyway, as Azim has said, hope to see you posting a lot more around these parts.
Good luck, Paul