As ongoing Greece’s debt defaults mounting Grexit pressures, the below strategy on hedging grounds is most suitable at prevailing Euro zone conditions, the pair is likely to sense little bearish downside risks as long legged doji formed on intraday charts at 138.2540 levels.This doji pattern indicating a market in complete balance between supply and demand but little bearish bias which was substantiated with volume confirmations, it also represents euro markets at a juncture of indecision and it can be an early warning that the preceding rally is losing stream.So in order to arrest these bearish risks, we continue to recommend diagonal spreads execution using In-The-Money and Out-Of-The-Money put options.Currency Option Insights: EUR/JPYHence, buy 1M (+1%) In-The-Money 0.61 delta put and simultaneously (-1%) 7D Out-Of-The-Money put with positive theta of EUR/JPY.This has been the perfect circumstance to deploy the diagonal bear put spread, because we expect EUR/JPY remains unchanged in short run and only goes down below the strike price of the put sold when the long term put expires.
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