Following yesterday’s EUR/USD decline many have questioned our conviction regarding the long EUR/USD trade we entered October 10. In short, we are sticking with this tactical trade into year-end. Our initial motivation was the anticipation of a contrarian (i.e. EUR/USD favourable) move in short-term spreads. From its October 6 nadir this spread move did occur lifting EUR/USD to its October 15 high before stalling on renewed Eurozone concerns. Thereafter however EUR/USD pressure resumed, most recently accentuated overnight by a seeming hawkish turn in the FOMC statement. Even so, we are reluctant to capitulate given ... (full story)