Question

Assume you have $1,000,000 to trade one time, you are required to plan buy/sell currency between 23/10 to 25/10. You have an option to use any one of the following currency pairs:

EUR/USD

GBP/USD

SDG/USD

AUD/USD

You are required to make a critical analysis and choose which currency pairs you will use to trade.

GBPUSD GBPUSD Adj. Close EURUSD EURUSD Adj. Close Close SGDUSD SGDUSD Adj. Close Close AUDUSD AUDUSD Adj. Close Close Close 0.682 0.682 Date FRI 10/25/2019 THU 0/24/2019 3/2019 1.2821 1.2851 1.2914 1.2821 1.2851 1.2914 1.1078 1.1104 1.1131 1.1078 1.1104 1.1131 0.7335 0.7332 0.7342 0.7335 0.7332 0.7342 WED 0.6818 0.6854 0.6818 0.685

Answer 1

The currency market is in bearish trend , as visible from trend analysis graph given in question . These currencies are showing fall in price from 23-Oct to 25-Oct.

I will refer to create my position in EURO USD option . I would prefer to create short position(sell the contract) on 23-Oct, and cover the position at 25-Oct to earn a profit of 0.48%.