Euro trade idea: How to play the long term trend accelerating lower

Introduction

VolatilityMarkets suggests top quant trade ideas to take advantage of trending markets.

Market summary

EURUSD last price was € 1.06125 . In the short term Euro has been negatively accelerating higher. In the long term Euro has been accelerating lower. Over the past 20 days, the EURUSD price increased 9 days and decreased 11 days. For every up day, there were 1.22 down days. The average return on days where the price increased is 0.1527% The average return on days where the price decreased is -0.2881% Over the past 20 Days, the price has decreased by -1.79% percent. Over the past 20 days, the average return per day has been -0.0895% percent. With the long term trend being the stronger of the two, we propose a short trade idea with an overnight time horizon.

The trade idea

Sell € 855,980 EUR , or 8.56 lots of Euro.

Take profit

At € 1.0591 level with 25.0% odds for a € 1,698 EUR gain.

Stop out

At € 1.0625 with 49.8% odds for a € 1,000 EUR loss through O/N time horizon.

Intraday predictions

EUR/USD trend analysis

EURUSD last price was € 1.06125 . The long term trend accelerating lower is stronger than the short term trend negatively accelerating higher. This trade goes short when the price was moving lower and accelerating over the past 20 days.

EUR/USD value analysis

Over the past 20 days, the EURUSD price increased 9 days and decreased 11 days. For every up day, there were 1.22 down days. The average return on days where the price increased is 0.1527% The average return on days where the price decreased is -0.2881% Over the past 20 Days, the price has decreased by -1.79% percent. Over the past 20 days, the average return per day has been -0.0895% percent.

EUR/USD Worst/Best case scenario analysis

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for EURUSD, is € 1.05766 , and the best case scenario overnight is € 1.06484 . levels outside of this range are unlikely, but still possible, to trade. We are 50% confident that € 1.0625 could trade and that € 1.0591 could trade. These levels are within statistical probability.

Expected range

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for EURUSD, is € 1.05766 , and the best case scenario overnight is € 1.06484 . levels outside of this range are unlikely, but still possible, to trade.

We are 50% confident that € 1.0625 could trade and that € 1.0591 could trade. These levels are within statistical probability.

Probability vs payout chart

This graph contrasts the percentage payout of holding a position vs the probability that the payout occurs. The red and green columns represent the probability of stopping out and taking profit and their associated payouts.

Key takeaways

• Price today € 1.06125.

• Over the past 20 days, the EURUSD price increased 9 days and decreased 11 Days.

• For every up day, there were 1.22 down days.

• The average return on days where the price increased is 0.1527%.

• The average return on days where the price decreased is -0.2881%.

• Over the past 20 Days, the price has decreased by -1.79% percent.

• Over the past 20 days, the average return per day has been -0.0895% percent.

• Over the past 20 days, The price has on average been accelerating: 0.0658 pips per day lower.

• Over the last session, the price increased by 7.1 pips.

• Over the last session, the price increased by 0.0669 %.

• Over the last session, the price decelerated by -38.92 pips.