This will come as no surprise to anyone, because as we noted previously it only took Goldman 2 days to Stolper its clients this time around. But just because the EURUSD apparently never actually "closed" below 1.35, Goldman formally kept the trade on for one more week subjecting clients to not only extra losses but much greater volatility. Today, everyone has had enough of this charade.
Closing long EUR/$ as risk sentiment failed to improve on new reform-friendly governments in Italy, Spain and Greece.
We recommended going long EUR/$ on November 11, based on the view that the nomination of 'technocrat-led' governments in Italy and Greece could lead to a clear reduction in risk aversion. This has failed to materialise - even after the reform-friendly election outcome in Spain. Moreover, with signs of renewed weakness in some cyclical indicators globally, such as the Philly Fed index or China's PMI this morning, EUR/$ could weaken further on risky asset correlations.
We would close this recommendation for a potential loss of about 2.3%.
And now we are eagerly looking for Thomas ".000" Stolper's next FX trade "reco"