We reckon EUR/USD downtrend likely to move in narrow range based on following reasoning.

When the observation on higher implied volatilities was coupled with weekly technical analysis, it triggers some sentiments for trivial upswings, here is the run through:

Please be noted that the observation on IVs creeping up while the pair evidences whipsaw patterns moving in narrow range and hanging on 21DMA curve since May 2015.

Ever since the price approached 21DMA curve it has been oscillating with this lagging indicator and moving in range bounded trend.

While leading oscillators substantiate this view by converging with the price line that is moving in linear direction.

As a result, hedging sentiments in OTC markets are retrogressive to what we've been seeing from last couple of months, to keep it precise we could notice neutral to slightly bullish hedging arrangements for next 1W-1M expiries (see risk reversals for 1W-1M expiries).

This could be attributed as writing opportunities for overpriced puts eyeing on short term upswings but keeping overall major trend to prolong bearish noises. Hence, the strategies have to be constructed so as to match this fluctuating trend.

These ATM vols in range bounded trend makes risk reversals into positive for 1 week's expiries and neutral for 1 month's expiries. We urge that this situation as a rosy opportunity to write ITM options as the neural delta risk reversals for next 1m contracts have coupled with whipsaw patterns on higher vols.

So, one can build bearish spreads capitalizing these upswings deploying ITM shorts in bear put spreads or put ratio back spreads or put ladders.