EUR/CHF in narrow range, yet make money via straddle shorts
On weekly plotting, gravestone doji appeared on 1.1048 levels.
After a brief upswings in new year series the doji pattern evidences the weakness again in this pair that pulled back the rallies in the narrow range trend again (see grey shaded rectangular area).
Since, these upswings were not sustained even though break out above resistance at 1.1011, leading oscillators began diverging to the previous rallies.
This range has prolonged almost for 6 months or so as you can point out on monthly plotting, so the moment when it breached the above range Gravestone doji pattern is occurred which means bears are highly active at these levels.
The prevailing prices have plunged below 7DMA and are attempting slide below 21DMA as well. Same is the case on monthly graph even though price bounces.
RSI on weekly is currently trending at 56 levels, while stochastic is also indecisive as there is clarity for trend direction.
On a break out and doji formation the considerable volumes were also in conformity to these slumps.
Option trade recommendation: Naked Straddle Shorting
IVs of 1W ATM EURCHF are at 7.3% which is the least among G20 space (good news for option writers).
Aggressive bears in short term can look ahead for shorts in near month futures for targets of 100-150 pips with stiff stop loss of 40 pips above.
Alternatively, we see the trend going in tight range between 1.1024 and 1.0736 which we perceive this as non directional but slightly downward bias since some bearish signals for short term basis are popping up. This has always been extremely tough & risky to have opened position in non-directional trend. But we like to extract profitability even in this narrow range and recommend shorting a straddle using At-The-Money options, thereby, one can benefit from certain returns by shorting both calls and puts.
At spot ref: 1.0959, short ATM put and ATM call simultaneously of the same expiry (preferably short term for maturity is desired).
After a brief upswings in new year series the doji pattern evidences the weakness again in this pair that pulled back the rallies in the narrow range trend again (see grey shaded rectangular area).
Since, these upswings were not sustained even though break out above resistance at 1.1011, leading oscillators began diverging to the previous rallies.
This range has prolonged almost for 6 months or so as you can point out on monthly plotting, so the moment when it breached the above range Gravestone doji pattern is occurred which means bears are highly active at these levels.
The prevailing prices have plunged below 7DMA and are attempting slide below 21DMA as well. Same is the case on monthly graph even though price bounces.
RSI on weekly is currently trending at 56 levels, while stochastic is also indecisive as there is clarity for trend direction.
On a break out and doji formation the considerable volumes were also in conformity to these slumps.
Option trade recommendation: Naked Straddle Shorting
IVs of 1W ATM EURCHF are at 7.3% which is the least among G20 space (good news for option writers).
Aggressive bears in short term can look ahead for shorts in near month futures for targets of 100-150 pips with stiff stop loss of 40 pips above.
Alternatively, we see the trend going in tight range between 1.1024 and 1.0736 which we perceive this as non directional but slightly downward bias since some bearish signals for short term basis are popping up. This has always been extremely tough & risky to have opened position in non-directional trend. But we like to extract profitability even in this narrow range and recommend shorting a straddle using At-The-Money options, thereby, one can benefit from certain returns by shorting both calls and puts.
At spot ref: 1.0959, short ATM put and ATM call simultaneously of the same expiry (preferably short term for maturity is desired).
