From last 2 weeks price jump in EURCAD has stalled resistance of 1.53 levels, once again this week prices have dropped just below 1.53 areas suggesting that EURCAD seems vulnerable for some decline lower if it holds this level on closing basis.

On weekly charts, a sharp long legged doji and last week's spinning top occurred exactly at trend resistance in conjunction with leading oscillators diverging previous weeks rallies that would signify more potential on downside.

We alarm from here onwards, the trend has taken halt and may experience retracements.

So the central idea is simple since intermediary trend has been downtrend but we've been seeing some price recoveries from last couple of days, hence avoid shorting ATM calls, instead usage of OTM calls are advisable in any of the strategies.

Here is the strategy on grounds, while holding underlying spot FX outrights, write deep OTM call option + hold an ITM put option (near month Call & mid month put).

The original trade view, entitled EURCAD poised for further retreat, was an opportunistic short-term idea that attempted to take advantage of large price swings in volatile markets.

The above strategy yields certainly when the pair either remains sideways or starts dipping down, thereby our shorts on deep OTM calls would fetch certain returns by initial credit received. And thereafter, the time for ITM puts with far month expiry functions.

Nevertheless, on speculative basis, trade with below positions.

As we could foresee more bearish potential on this pair, huge profits achievable using suitable leveraging instruments with vega puts.

Hence, weights are to be more to cushion downside risks as a result, we recommend holding 15D at the money 0.50 delta call and simultaneously hold 2 lot of 1M at the money -0.50 delta put options.

With the strip strategy positive cash flow is possible irrespective of swings directions, when EURCAD exchange rate makes a strong move either upwards or downwards at expiration, with greater gains to be made with a downward move.

Any potential downswings should be optimally utilized, so as to participate in that downtrend, weights in the portfolio should be doubled with ATM puts in order to give the leveraging effects. The profitability can be maximized for every shift towards downside and this is not the same on upside.