I was stopped out of this position yesterday after a stronger-than-expected Q3 GDP number in the UK and also the announcement that S&P had upgraded the UK’s sovereign debt outlook to neutral from negative (because of the spending review).

I am inclined to say that this was a perfectly reasonable trade that just happened to be stopped out. The drivers remain in place for EUR to appreciate against GBP, in that the BoE is much more likely than the ECB to embark on further monetary stimulus. Not every signal works in an uptrend.

Update: I did say here that this kind of reversal could happen — at least I was prepared for this kind of setback.