Posted by lessarda on 21st of Jan 2011 at 03:47 pm
Goldman put a 1.37 target on the Euro/US$ cross when it was
trading in the 1.32-1.33 range early in the week. The
quick move towards the target shows they were on to something,
which may have been seeing heavy call selling up in the
target range combined with heavy
put buying closer to the money at 1.32. Such a specific
short-term target by GS would make sense in that case, with the
idea that working against this bearish spread might be the way the
market (or Goldman) wanted to push. If so, we could see a flush out
near the target or even a throwover spike and then see whether the
bearish wedge forming now plays out. I would bet that GS will be
short Euro near their target.
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Goldman target = 1.37
USD and Euro Wedges
Posted by lessarda on 21st of Jan 2011 at 03:47 pm
Goldman put a 1.37 target on the Euro/US$ cross when it was trading in the 1.32-1.33 range early in the week. The quick move towards the target shows they were on to something, which may have been seeing heavy call selling up in the target range combined with heavy put buying closer to the money at 1.32. Such a specific short-term target by GS would make sense in that case, with the idea that working against this bearish spread might be the way the market (or Goldman) wanted to push. If so, we could see a flush out near the target or even a throwover spike and then see whether the bearish wedge forming now plays out. I would bet that GS will be short Euro near their target.