There was a time when Goldman's Tom Stolper lost money for Goldman's clients with such speed and fury, it left people's head spin (see here when he was closed out in a matter of days). There was also a time when Stolper was supposed to be stopped out but refused to do so until the EURUSD cross actually closed trading inside his stop zone (which it eventually did). Today, however, the second the EURUSD touched above 1.3700 the Goldman strategist decided to get the hell out of dodge and has picked up his 400 pips since putting on the long EURUSD reco several weeks ago. With that last reco, Stolper has modestly redeemed himself, and all those who had listened to his previous recos have made some 400 pips, which hopefully should compensate for some 5000+ pips in cumulative downside to date.
Closing our long EUR/$ recommendation after reaching the 1.37 target
We had signalled in early January that the fiscal risk premium reduction in the Euro area could push EUR/$ up to 1.37. Moreover, the improved macro outlook after having avoided the 'fiscal cliff' made us confident that a risk-related USD rally was unlikely. As a result, we rolled our existing long EUR/CAD recommendation into a long EUR/$, opened at 1.3270 for a target of 1.37.
We do see some additional upside in EUR/$ and keep our 3-, 6- and 12-month forecasts at 1.40 but after some sharp FX moves early in the year, we consider it prudent to stick to the target. We close our recommendation for a potential gain of 3.3%.