Goldman's Latest FX Mea Culpa: "What We Have Is Huge Position Liquidation"

Tyler Durden's picture

From Goldman's FX Trading Desk

On Tuesday I mentioned that I had turned neutral and cautiously wondered whether the Euro was now a buy on dips rather than a sell on rallies. Not for one moment did I envisage the collapse down to 1.2144 nor amidst the panic did it feel like a buy when we were down there and yesterday I was part of the huge herd that chose to sell into the eur/chf brick wall at 1.4005, only to pay the price later.

What we have seen in the past 24 hours is huge position liquidation with all the favoured trades being cut regardless of their correlation to broader risk asset ; positioning now must be much lighter. The euro from here is a very tough call and I'm still inclined to try and trade opportunistically intraday within the context of a range rather than have a strong directional bias. To the topside the 1.2445 level has capped repeatedly this week and a close above this level would be potentially constructive, though John Noyce has also signalled the significance of 1.2510.  First support should come in at the Asian low of 1.2321 with the key support at the years low (1.2144) and the much advertised 50% retracement level of 1.2134 .
Good luck

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if's picture

Memo to the GS FX desk:

Never, ever bet against the SNB via the EUR/CHF.  They are allowing a 3% appreciation about once every two months.  They might let it go sooner if the macro implications of their folly becomes too risky.  Either way they have an infinite amount of CHF and the political leeway to deploy it violently.



mister_x's picture

So is this part of their "hedging" or "insignificant" prop trading strategy with play money?


Sounds no different from what retail daytraders do, except you get to look at all the patsies' hands.

bingaling's picture

Translation: Hi Everyone. I will soon be fired because I had a losing day working at Goldman and well as seen by our quarterly reports that isn't aloud . Also since I have no clue as to what is going on I have put a neutral call on the Euro and I think it will trade within a range . There is no way this can drop below 1.2134 so try and play that if it does drop below that level I would like to remind you I have no idea what is going on even though that is my job . Thank you for patience while I get my shit together after a rough day .-Goldman

Cursive's picture

LOL.  And then they wrote this great insight:

The euro from here is a very tough call and I'm still inclined to try and trade opportunistically intraday within the context of a range rather than have a strong directional bias. 


tonyw's picture

Prediction is very hard, especially about the future - Yogi Berra


that's obviously why they need such high rewards


thisandthat's picture

Or, as we say: prognostics, only after the game ends.

mephisto's picture


What we have is huge position liquidiation by our clients getting tired of being stopped out, and taking their business elsewhere. Without the information and margin we get from their flow business, we have no clue where its going next, and no profit to play with in our spare time anyway.

We tried 1 thing yesterday and got our ass handed to us. We are never, ever relocating to Geneva if I have anything do do with it. Fucking swiss.

So here is a 300 tick range on the most major FX pair in the world, one that a 3 year old with a crayon could derive for you. Fuck you all.

Renfield's picture

Yup, says the same thing.

Somehow yours was a lot more fun to read though.

BlackBeard's picture

Oh...look everybody... when they don't OWN the market...Goldman boys are actually REALLY shitty traders!

Grand Supercycle's picture


For several days I have been warning of EURUSD buying support as detected by my indicators, and this has been confirmed by the recent break out.

The proprietary indicators I use can identify trend changes before they occur.