The uncertainty of EUR/USD's direction means traders could benefit from an option that covers the risk of a breakout.
EUR/USD is stuck within the thinning daily cloud, which on Friday encompasses 1.0983-1.1064.
Direction from here is uncertain.
EUR/USD still has a chance to drop under the cloud base, but its failure to close under the 1.0994 Fibo -- 61.8% of the 1.0879 to 1.1180 October rise -- hints at a bear trap.
That could lead to recovery above the daily cloud top.
An example of a prudent way traders can cover a break either side of the cloud is by investing in a two-week EUR/USD strangle option: simultaneous purchasing of a two-week 1.1065 EUR call and a two-week 1.0985 EUR put for a combined cost of 38 pips.
Profit potential is unlimited if spot either rises above the 1.1103 or falls below the 1.0947 break-even points before the Nov.
Losses are limited to the 38-pip premium.
Calculations are EUR/USD at 1.1032 on the EBS.
Daily Ichimoku Chart: Click here