> Well, around 22 April Danske was targeting 1.33 due to a combination of US QE, YEN QE, market positioning stretched, and fading expectations of EZ tail risk. Goldman agreed but for different reasons, said EZ external balance solid compared to US. JP Morgan initially agreed but changed their minds about a week ago.

Having seen the price action that has traded since 22 April, you can’t say those bets were a sure thing assuming if you jumped on board!

The uptick in E/U is certainly not because anyone’s buying into Euro as the alternate reserve currency, it’s more like seeing which of these 2 bad apples is more rotten right now – and there’s no trigger to create the type of extreme fear (or greed) needed to move the pair. I sense the market is becoming too complacent, which means when the real trigger come we are gonna see some real friggin fireworks.

I’m still inclined to short for the same reasons you set out, but will keep powder dry for now…particularly given the upcoming ECB rate decision. Most are predicting a cut, but I think there’s a decent chance the ECB will hold – which will prompt another upspurt.

Ideally, I’d like to build a short core position in the 3230-80 region with a tight stop above. Thoughts?

> There are some big event risks surrounding Fed/ECB. Maybe we’re going to see some sharp whipsaws in this pair beofore all is settled. Placing stop-loss in this environment is really tricky…could end up being the feast of dealers!