Euro Trade Plan
Each day, ForexChaser.com team produces a set of eight trade plans for the foreign exchange market. The trade plans are the main drawing board of ForexChaser.com: this is the place where most trade ideas come from.
Latest Update: May-12-2010, 16:00 ET
Eur/Usd Overview: The Eur/Usd had been recently in an ascending trend, but many ask if this is only a temporary bounce (also known as a “dead cat bounce”) or an actual change in trend. We tend to favor the first part for the time being, but we are also open to idea that the pair could go side-ways for some time. Spot traders should favor the short side of the market, while options traders should limit their exposure towards long call or shot put Eur/Usd contracts.
Eur/Usd Options: Investors should look for …..
| Percentage gain | Volatility | Trend | Signal | |
|---|---|---|---|---|
| Monthly | 6.70% | 14% | Higher | Buy |
| Weekly | 1.15% | 18% | Higher | Buy |
| Daily | -0.30% | 16% | Flat | Buy |
| 4-Hours* | 1.04% | 22% | Flat | Buy |
| Daily Trading Signals | Entry | Target 1 | Target 2 | Target 3 | Stop Loss |
|---|---|---|---|---|---|
| Long | 1.3090 | 1.3140 | 1.3190 | 1.3240 | 1.3030 |
| Short | 1.2960 | 1.2920 | 1.2865 | 1.2800 | 1.3010 |
How to trade the Daily Trading Signals?
Investors should use the Daily Trading Signals as a guideline for placing trades on the daily time-frame. These signals should be loaded only when the Entry area is touched and traders believe that the currency pair is likely to continue to move in order to touch the targeted areas. When the Target is touched, closed 50% of the trade and move the SL to the prior Target area or set a trailing stop for the order.
E.g. When Target 2 is touched, close 50% of the trade and move the SL to Target 1
| Important Price Points | Intraday Level 1 | Intraday Level 2 | Daily Level 1 | Daily Level 2 |
|---|---|---|---|---|
| Resistances | 1.3090 | 1.3180 | - | - |
| Supports | 1.2965 | 1.2900 | - | - |
| Daily Correlation | Eur/Usd | Gbp/Usd | Aud/Usd | Usd/Cad | Usd/Chf | Usd/Jpy | Eur/Jpy | Gbp/Jpy | Aud/Jpy |
|---|---|---|---|---|---|---|---|---|---|
| Eur/Usd | 100% | 83% | 71% | -31% | -56% | -60% | 83% | 36% | 61% |
Correlation quantifies how much two variables move together. In our case, it measures the relationship between two exchange rates, for example Eur/Usd and Usd/Chf. If the correlation coefficient is 0%, it means that there is no relationship between the two currencies (this happens very rarely). A 100% correlation means that the two currencies move identical, while a -100% correlation coefficient means that the two also currencies move identical, but in opposite direction.
| Eur/Usd Quantitative Forecast | 1-Day Forecast | 3-Days Forecast | 5-Days Forecast |
|---|---|---|---|
| Price | 1.3010 ± 0.0075 | 1.2900 ± 0.0160 | 1.2810 ± 0.0260 |
| Volatility | 16% ± 0.8% | 15% ± 1.3% | 15% ± 2.1% |
These are one step-ahead forecasts, built using ForexChaser.com premium quantitative modeling technique. The resulting numbers are based on mathematical studies and on hours of data-mining in order to provide the most accurate signals. One should note that due to the market’s tendency to be “informationally efficient”, past performances do not necessarily predict future performances, meaning that the actual number might differ from the predicted value.
