FxWirePro: EUR/JPY naked straddle sale for active traders, speculate binary calls for targets at 135.50

Technical Purview:

This has always been extremely tough & risky to have opened naked position on non-directional trend. EUR/JPY is now alike a non directional pattern as this pair is boiling up with lots of bearish candles, such as spinning top and candle resembling a shooting star occurred at 135.802 and 135.793 respectively.

Currently, RSI (14) trending near 40.6655 levels with downward convergence but intraday is quite bullish bias; on closing basis movement should be closely watched if it suggests reversal signals.

Option trade recommendation: Straddle shorts

As we foresee non-directional trend is puzzling this pair on EOD charts we like to remain in safe zone and recommend shorting a straddle, thereby, one can benefit from certain returns by shorting both calls and puts.

Short ATM put and ATM call (strikes at 134. 63) simultaneously of the same expiry (preferably short term for maturity is desired).

Maximum returns for the short straddle is achieved when the EUR/JPY exchange price on expiry trades between 134-135 levels only as both the instruments have to wipe off worthless. So that the options trader gets to keep the entire initial credit taken as profit.

But on intraday front, we suggest going for long in binary calls for a targets at 135.415, this would provide best speculating opportunity as in swing trade rallies buying interests are intensifying.