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Short on the EuroDollar

Dear Reader,

I would like to start the week by mentioning the oppportunity for a 150 pips potential movemement down on the euro.

The EURUSD is trading in a range between 1.368 and 1.345 since a week. That makes a 230 pips game range. The price failed to break up two times already, which makes me consider taking the short side of the pair.

We are now trading around 1.36. It means that to benefit form this trade, one would have to risk 80 pips that it gets back to 1.368 versus gaining 150 pips to the 1.345.

There will be a test at 1.358 and if it goes thourgh, it is going to look good.
If it breaks down, I will increase my position on the short side until 1.345.

If it reverses, I have my stop loss at 1.368 and will change my views when we reach this level. If it breaks the 1.368, I will change to a long euro position but before that I remain short.

You will find below my calculated implied probabilities for the moment:

On the downside: 1-Mar-10 10:56 AM Spot 1.3603            
Market implies a  20.0% chance of having the EURUSD touching 1.3291 before the 8-Mar-10  -> 312 pips from spot
Market implies a  30.0% chance of having the EURUSD touching 1.3356 before the 8-Mar-10  -> 247 pips from spot
Market implies a  40.0% chance of having the EURUSD touching 1.3407 before the 8-Mar-10  -> 196 pips from spot
Market implies a  50.0% chance of having the EURUSD touching 1.3448 before the 8-Mar-10  -> 155 pips from spot
Market implies a  60.0% chance of having the EURUSD touching 1.3484 before the 8-Mar-10  -> 119 pips from spot
Market implies a  70.0% chance of having the EURUSD touching 1.3516 before the 8-Mar-10  -> 87 pips from spot
Market implies a  80.0% chance of having the EURUSD touching 1.3546 before the 8-Mar-10  -> 57 pips from spot
Market implies a  90.0% chance of having the EURUSD touching 1.3574 before the 8-Mar-10  -> 29 pips from spot
                         
On the upside:                        
Market implies a  90.0% chance of having the EURUSD touching 1.3628 before the 8-Mar-10  -> 25 pips from spot
Market implies a  80.0% chance of having the EURUSD touching 1.3654 before the 8-Mar-10  -> 51 pips from spot
Market implies a  70.0% chance of having the EURUSD touching 1.3681 before the 8-Mar-10  -> 78 pips from spot
Market implies a  60.0% chance of having the EURUSD touching 1.3710 before the 8-Mar-10  -> 107 pips from spot
Market implies a  50.0% chance of having the EURUSD touching 1.3741 before the 8-Mar-10  -> 138 pips from spot
Market implies a  40.0% chance of having the EURUSD touching 1.3777 before the 8-Mar-10  -> 174 pips from spot
Market implies a  30.0% chance of having the EURUSD touching 1.3819 before the 8-Mar-10  -> 216 pips from spot
Market implies a  20.0% chance of having the EURUSD touching 1.3874 before the 8-Mar-10  -> 271 pips from spot

Ejoy your trades!

Remy