Score 9.0 (out of 10): Euro Spot sets up for -2.9% drop in 2 months

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What’s Going On Here?

The European Central Bank has indicated that they won’t even consider raising interests next year while the market expects that the US Central Bank (Fed) will start raising interest rates already by mid 2022. Relative interest rate differentials tend to hurt the Euro.

Why Now?

Euro Spot has triggered a new high volatility signal (1 month). During similar occasions, Euro Spot exchange rate had a median return of -2.9%, over the following 2 months – based on 8 historical occasions with 8 of those showing negative returns (100%). This sell signal for Euro Spot received a high score of 9 (out of 10). This insight was generated on 2021-November-10 with last price of 1.1486.

What’s This Currency About?

Based on the last 2 years’ risk/return profile, this asset is seen as Moderate Risk. Ticker symbol: EUR/USD

What’s My Risk / Reward and Time Horizon?

We found 2 months to be the optimal trade horizon, after testing a number of possible alternatives (accuracy of previous returns), otherwise consider closing out this trade once the target level of 1.1157 (-2.9%) has been reached. Based on the currency’s recent up and down swings, LongShortBets suggests considering a stop loss level for this insight at 1.1623 (last price at 1.1486), which is equivalent to +1.2%.

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ shown under (2), etc. 

Previous episodes:

-3.4% (May-2021), -1.2% (February-2020), -1.9% (6-2018), -0.7% (February-2018), -2.9% (June-2015), -5.9% (February-2015), -7.5% (December-2014), -2.9% (September-2014)./

Summary:

NameEuro Spot
ViewDown
Star (1 to 10)9.0
Target-2.9%
Time2 months
Hit Rate100%

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