Numanti - FairRate EUR/USD Fair Value

FairRate | EUR/USD Fair Value Indicator

Know When EUR/USD Is Overpriced or Underpriced

Price tells you where the market *is*. Fair value tells you where it *should be*.

EUR/USD doesn't move randomly. Interest rates, yield curves, risk appetite, and equity flows drive where the pair trades over time. When price strays too far from these fundamentals, it tends to snap back.

FairRate shows you exactly how far price has strayed.

How It Works

The indicator calculates a fair value for EUR/USD based on macroeconomic variables updated weekly. It then measures the deviation between current price and fair value in standard deviations (the z-score).

> +2σ --> EUR significantly overvalued — watch for pullback
+1σ to +2σ --> EUR above fair value
-1σ to +1σ --> Near equilibrium
-1σ to -2σ --> EUR below fair value
< -2σ --> EUR significantly undervalued — watch for bounce

The bigger the deviation, the stronger the fundamental pressure for mean reversion.

What You See on the Chart

- Fair Value Line — Where EUR/USD "should" be trading
- ±1σ and ±2σ Bands — Normal and extreme deviation zones
- Info Panel — Current fair value, z-score, and signal status

When price pushes into the outer bands, fundamentals are stretched. That's where opportunities often emerge.

Model Quality

This isn't a typical indicator or curve-fitted approach. It's a proper econometric model:

- R² > 80% — Fundamentals explain most of EUR/USD movement
- Out-of-sample validated — Works on data the model never saw
- Updated weekly — Fresh estimates every Friday
- Research-backed — Methodology documented in white paper

How Traders Use It


Mean Reversion
When z-score hits extreme levels (±2σ), look for reversal setups. Combine with your technical analysis for entries.

Trend Confirmation
If price is trending AND fundamentals support it (z-score moving in trend direction), that's a stronger move.

Risk Filter
Avoid counter-trend trades when z-score is near zero — there's no fundamental reason to expect a reversal.

Context Layer
Add fundamental context to pure price action. Know whether you're trading with or against the macro backdrop.


### What This Is NOT

- Not a buy/sell signal generator
- Not a timing indicator
- Not a substitute for technical analysis

FairRate is a fundamental layer — one piece of the puzzle that tells you whether EUR/USD is cheap, expensive, or fairly priced right now.

The Model

Built on peer-reviewed econometric methodology. The model captures the fundamental drivers that institutional desks use to assess currency valuation — not a black-box indicator or curve-fitted pattern.

Add FairRate to your EUR/USD analysis. Know where fundamentals stand.
© 2025 Numanti. All rights reserved.