FXE Forecast + Trading Strategies


Bullish Case: FXE shows a mean-reverting nature with a neutral AI forecast of +0.2%. Low implied volatility across term structures and a Helium volatility forecast 1% higher than market indicate upside risk. Longer-term holds have seen decent returns.


Bearish Case: FXE is trading at -26.2% from ten years ago with limited recent positive performance. High volume in put options and relatively higher implied volatility on lower strikes suggest bearish sentiment. Recent price action indicates stagnation.


Potential Outcomes:

1. Sideways movement due to mean reversion and low volatility: 45%.

2. Moderate uptrend due to marginal bullish indicators and low downside risk: 35%.

3. Bearish movement driven by negative past performance and put options volume surge: 20%.


Trading Oracle: Bullish debit spreads make sense. Buy 3 $99.0 strike calls, sell 2 $101.0 strike calls expiring in ~49 days. Market odds of profit at 43%, strategy annual return at 42%. Capitalizes on low implied volatility and supports mean reversion potential.


June 30, 2024


Invesco CurrencyShares Euro Forecast

FXE      Invesco CurrencyShares Euro











Correlated Assets

Assets that tend to move strongly with FXE



VFC Forecast + Options Trading Strategies   VFC  VF (0.28)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.21)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.15)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.28)



Uncorrelated Assets

Assets with little price relationship to FXE



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.15)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.21)


VFC Forecast + Options Trading Strategies   VFC  VF (0.28)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.28)



Anticorrelated Assets

Assets that tend to move strongly against FXE



VFC Forecast + Options Trading Strategies   VFC  VF (0.28)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.21)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.15)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.28)





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