EUR/USD Spread Betting

EUR/USD Spread Betting

EUR/USD Spread Betting Guide

arrow_forwardLive EUR/USD Chart
arrow_forwardLive EUR/USD Prices
arrow_forwardWhere to Spread Bet on EUR/USD
arrow_forwardHow to Spread Bet on EUR/USD


Live EUR/USD Chart and Prices





21 September 2017: Only Hindsight Can Help in These Situations

I’m still not 100% sure what to do in these situations, i.e. when new information hits the market and a short-term chart shows a sell off like this:

EUR/USD Chart
Ouch!


I was about 120 points up (£60 up) during the day.

As the market spiked down I closed for a pointless £2.05 profit… but even that became a loss once I added £3.66 in rolling costs (6 nights x £0.61/night).

Total Spread Betting Loss = £1.61!

OK, clearly that’s not a disaster.

Looking back, with a strong looking sell off, it was probably wise to close and wait to see how the market reacted to the Fed update.

At the time, it sounded like the fundamentals had changed. If so, I definitely needed a bit more time to survey the field and see if the general uptrend was still in play or not.

Of course, knowing I had plenty of time to bank the 120 points is annoying.

Why Didn’t I Bank the Money?

I thought the Fed would be more Dovish.

At the time, my main concern was that my Limit order would close my trade when I wasn’t watching and I’d lose out on the obvious uptrend (yes, the uptrend never happened).

EUR/USD Bounces Off the Bottom of the Up-Channel
Since the FOMC update, EUR/USD has bounced off the up-channel support we’ve been looking at:

EUR/USD Chart
Hold the line! Stay with me!


Next Spread Bet?

If the support holds then it’s tempting to buy again.

To me the fundamentals haven’t changed much. The market, myself included, just had a quick panic.

Right now, I will wait:
  • arrow_forwardTo see if the channel is re-tested, and
  • arrow_forwardFor my irritation to die down. As always, it’s better to trade when you’re thinking rationally
I may also switch to USD/JPY… if the dollar is looking more robust and the yen is still looking weak.


20 September 2017: A Word of Caution for the Euro/Dollar Market

The Fed could announce a rate change today – although this is highly unlikely.

It’s all about whether the Fed signals a rate rise in December and the bond market is pricing a 50/50 chance of that.

Looking specifically at the euro/dollar market, Michael Hewson, Chief Market Analyst, at CMC Markets has said:

We could drift back up to the $1.2090 highs with the potential to test $1.2170 but momentum continues to look a little stretched. The odds still favour a drift back to the $1.1800 area.


19 September 2017: EUR/USD Stuck at $1.2000?

The market has been having an issue with $1.2000 since 29 August and it’s tempting to close for 120pt profit rather than aim for the $1.20650 level set for the Limit order.

If we fail at $1.2000 then the market could drop and test the support at 1.1820 which could end up in a nasty loss if that support fails.

Having said that, there doesn’t seem to be much pro-dollar news and market is still firmly in the up channel.

Also, I don’t particularly like changing my trading plans unless there some new key data that suggests a change of plan.

I’m going to hold on this trade for now.

Also, note that I’ve only taken a small £0.5/pt buy that makes it much easier for me to be rational and patient with this trade.

At the same time, the overnight rolling cost is £0.61/night so this isn’t a long-term trade.


Next Move? Of course, if we keep bumping along $1.2000 then it will be time to take the profit.

If so, then it may just be a case of waiting to get through the $1.2000 – $1.217 area and then buying again. That plan needs more thought though.

EUR/USD: 1 Day Chart: 19 September 2017
Come on! Break $1.2000!… please?



14 September 2017: EUR/USD Trend is Too Tempting

I’ve had a small buy of EUR/USD.

The market is near the up-channel support, i.e. the upwards trend that’s been in play for most of the year.

EUR/USD: 1 Day Chart: 14 September 2017

EUR/USD Trade Set-Up
I’ve only taken a small £0.5/pt buy at $1.18789.

There’s near-term support around $1.170 – $1.175 so I’ve set my Stop Loss a little below that at $1.16600.

EUR/USD rarely gaps by any notable amount so I won’t use a Guaranteed Stop Loss.

The main resistance is around the $1.217 level, i.e. the 50% retracement of the $1.399 – $1.034 down move so I’ve set my Limit order (Take Profit order) just below that at $1.20650.

  • trending_upPotential Loss = ($1.16600 – $1.18789) x £0.5/pt = -$0.02189 x £0.5/pt = -218.9pts x £0.5/pt = -£109.5 loss
  • trending_downPotential Profit = ($1.20650 – $1.18789) x £0.5/pt = $0.01861 x £0.5/pt = 186.1pts x £0.5/pt = £93 profit
Contingency plan: If there is an unexpected and quick rise within a day or so then I might bank a 100 profit and wait for the market to come back to the support.

Next: the usual problem… keeping my fingers off this trade.


13 September 2017: EUR/USD Remains in a Strong Uptrend

EUR/USD is still in its strong uptrend, a trend based on dollar-weakness and euro-strength.

If the market gets close to the support line of the up-channel, then it will be tempting to have a small buy and keep a relatively tight Stop Loss.



Where Can I Spread Bet on EUR/USD?

Most FCA regulated spread betting firms offer live prices and charts on forex markets like EUR/USD.

See the FX comparison table below.


EUR/USD Spread Betting Comparison

Company Forex Min
Stake
EUR/USD
Spread
GBP/USD
Spread
EUR/GBP
Spread
USD/JPY
Spread
AUD/USD
Spread
Apply
Financial Spreads Review £0.50 0.7 0.9 0.8 0.8 0.8 Apply
City Index Review £0 Variable Variable Variable Variable Variable Apply
ETX Capital Review £0.50 0.88†† 1.19†† 1.32†† 1.38†† 1.14†† Apply
IG Review £1-5 Variable Variable Variable Variable Variable Apply
InterTrader Review £1 Variable Variable Variable Variable Variable Apply


How to Spread Bet on EUR/USD

As an example, let’s imagine you are interested in financial spread betting on EUR / USD, you look at a spread betting site, such as Financial Spreads, and see that they are offering the latest spread of:

EUR / USD Rolling Daily: $1.35860 – $1.35870

Here is what you need to know about how it works:

Spread Betting Market: EUR / USD Rolling Daily
Spread Betting Price: $1.35860 – $1.35870
This Means That: You can speculate on the EUR / USD Rolling Daily market to go:

    arrow_downward  Higher than $1.35870, or
  arrow_downward  Lower than $1.35860

This is a ‘Rolling Daily’ spread betting market meaning that it does not have an expiry date. If you decide not to close your position and the session ends then your trade will automatically roll over to the next session.

Note that if a trade rolls over then you will normally either pay or receive a small fee for overnight financing depending on whether you are speculating on the market to go down or up.

To learn more see Rolling Daily Spread Bets.
Units Traded: Spread bets on the EUR / USD market are priced in £x per point.

Where a point is $0.00010 of the forex pair’s price movement.

E.g. if EUR / USD market moves by $0.00450 then you would gain or lose 45 multiples of your stake.
Stake Size: You work out your stake per point, e.g. £1 per point, £3 per point, £10 per point, £15 per point etc.
Brief Staking Exercise: If, for example, you decided on a stake of £3 per point and EUR / USD moves $0.00300 (30 points), you would win or lose £3 per point x 30 points = £90.


Spread Betting Example | Going Long of the Euro / Dollar Rate

Financial spread betting on the forex pair to increase

You Decide to Go Long or Short: EUR / USD to push:

  arrow_upward  Higher than $1.35870? or
  arrow_downward  Lower than $1.35860?

Let’s Assume You Decide to Go Long:   arrow_upward  Higher than $1.35870
You Choose Your Stake Size, Let’s Say You Opt For: £3 per point
Now What Happens?
  • You will gain £3 for each point ($0.00010) EUR / USD goes higher than $1.35870
  • You will lose £3 for every point ($0.00010) EUR / USD drifts lower than $1.35870
When Going Long of a Market Your P/L = (Final Price – Initial Price) x stake per point
 
Example 1 EUR / USD moves higher and the market is revised and is set at $1.36346 – $1.36356.
Time to Take a Profit? You could decide to leave your spread bet open or close it and lock in your profit. In this instance you opt to close your forex trade by selling the market at $1.36346.
Your P/L = (Final Price – Initial Price) x stake per point
($1.36346 – $1.35870) x £3 per point (£3 per $0.00010)
$0.00476 x £3 per point
47.6 points x £3 per point
Your P/L = £142.80 profit
 
Example 2 EUR / USD moves lower and the forex spread betting market becomes $1.35462 – $1.35472.
Time to Restrict Your Loss? At this point, you may decide to leave your bet open or close it to restrict your losses. In this case you opt to settle your position and sell at $1.35462.
Your P/L = (Final Price – Initial Price) x stake per point
($1.35462 – $1.35870) x £3 per point (£3 per $0.00010)
-$0.00408 x £3 per point
-40.8 points x £3 per point
Your P/L = -£122.40 loss



Trading Example | Taking a Short Position on EUR / USD

Spread betting on the forex pair to decrease

You Work Out Whether to Go Long or Short: EUR / USD to go:

  arrow_upward  Higher than $1.35870? or
  arrow_downward  Lower than $1.35860?

Let’s Assume You Sell:   arrow_downward  Lower than $1.35860
You Decide Your Stake, Selecting: £2 per point
So What Next?
  • You will lose £2 for every point ($0.00010) EUR / USD increases higher than $1.35860
  • You will gain £2 for every point ($0.00010) EUR / USD goes below $1.35860
When You Go Short With a Spread Bet Your P/L = (Initial Price – Final Price) x stake per point
 
Example 3 EUR / USD pushes lower and the forex spread betting market is moved to $1.35327 – $1.35337.
Time to Lock in Your Profit? At this point, you may opt to leave your spread bet open or close it in order to lock in a profit. For this example, you opt to close your position and buy the market at $1.35337.
Your P/L = (Initial Price – Final Price) x stake per point
($1.35860 – $1.35337) x £2 per point (£2 per $0.00010)
$0.00523 x £2 per point
52.3 points x £2 per point
Your P/L = £104.60 profit
 
Example 4 EUR / USD pushes higher and the financial spread betting market is revised and changes to $1.36298 – $1.36308.
Limit the Loss?At this point, you could decide to let your bet run or close it, i.e. close your spread bet and restrict your loss. In this instance you opt to settle your bet by buying at $1.36308.
Your P/L = (Initial Price – Final Price) x stake per point
($1.35860 – $1.36308) x £2 per point (£2 per $0.00010)
-$0.00448 x £2 per point
-44.8 points x £2 per point
Your P/L = -£89.60 loss


Euro / Dollar Notes:

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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