FxWirePro: €/$ to test 3 month’s lows; tunnel construction using ITM binary puts

Greek banks were set to reopen on Monday after a forced 3-week closure but restrictions on cash withdrawals were still to remain. In a decree Saturday, the Greek government kept the daily cash withdrawal limit at €60 but added a weekly limit of €420.

While USD has once again latched onto recent upbeat comments from Fed Chair Yellen far more than the US rates markets have and so we remain a little wary of how far the USD can push on its own.

EURUSD is a massive speculative market offering chances of shorts and the pair is lingering near 1.0818 to hit three months lows, ahead of the 1.05/1.0450 lows set earlier this year. We remain biased for a gradual move to those lows, with technical resistance lying at 1.0910/65 and then 1.1075/1.1100.

Leading oscillators RSI and slow stochastic were bearish bias but for today shown a little divergence to the falling prices. Currently, RSI (14) is trending at 36.3420, while %D line oscillates at 3.1884 and %K line at 6.0415.

The Tunnel using ATM puts is structured as a binary version of a conventional put spread, i.e. long delta puts with higher strikes while writing the lower strikes for a target of 20-25 pips.