61.8% retracement nice place for call options
The move lower after the 1.1370 area in the EURUSD pair is no impulsive move but what is interesting is the fact that it comes into 61.8% retracement and this is all that matters for bulls.
In terms of corrective waves, only a flat pattern can retrace more than the 61.8% level and this means that we already have wave a to the upside followed by wave b.
The c wave to the upside we’re looking for now is supposed to be a five wave structure, or an impulsive move, which can be a classical one or not. What really matters here is the fact that the market should move to the upside so call options from the 1.10 level are recommended.
The fact that an impulsive move is expected does not mean that we’re going to see a new high when compared with 1.1370 area. In fact, we are not looking for a new high, but values above 1.12 should come and this gives plenty of room for the option to expire in the money.
How to trade
In the case of an aggressive move higher today, any 1.11 area should be a nice opportunity to buy put options as bears are trying to push this pair to the downside on each and every attempt higher.
There are no important economic releases today and as a matter of fact the whole week is light in terms of fundamental news, so markets should move solely on technical. This EURUSD here is bullish from a technical point of view, so call options should be traded.