Bearish Marubozu on EUR/USD; optimize potential slumps with PRBS

Technical Insights:

No trace of recovery when weekly chart was plotted.

"Bearish Marubozu" candlestick pattern was traced out on weekly chart of this pair. The bearish candle with no shadow extending from the body at either the open, the close or at both.

The red candle in an uptrend is a strong reversal signal as it appeared exactly at the highs of bull rally at 1.1467, revelation the end of the trend (whether short term or medium) and a coming reversal with a strong support 1.0592 level.

The formation of this pattern indicates that it has traded strongly in one bearish direction throughout the session and closed at its high or low price of the day.

The name means close-cropped or close-cut in Japanese, though other interpretations refer to it as Bald or Shaven Head.

The red marubozu indicates that sellers has strong control over the prices from the opening session to the close of the day and is perceived very bearish.

The oscillators RSI (14) and stochastic are moving in downward convergence with the price line which support and signify our bearish view.

Currency Options Strategy for rescue into further slumps: Put Ratio Back Spread

Arrest further downside risks of this pair hedging through employing Put Ratio back Spread.

Expect the underlying currencies EURUSD in this case to make a large move on the downside.

As shown in the figure purchase more puts (ATM) and sell fewer puts of a higher strike (ITM) usually in a ratio of 2:1 or 3:2

The higher strike short puts finances the purchase of the greater number of long puts and the position is entered for no cost or a net credit.

The underlying exchange rate has to make substantial move on the downside for the gains in long puts to overcome the losses in the short puts as the maximum loss is at the long strike.

Give it a longer time to expiration so as to make a substantial move on the downside.