A break of EUR/USD 1.2250 option barriers would open the way to those at 1.2300 and much more above the 2-year high at 1.2350.
But those worried about, or wanting to take advantage of, further EUR/USD gains can use these barriers to their advantage.
Option barriers typically attract defence from those who stand to profit if they remain intact until expiry, and FX traders will typically piggy back that, adding to resistance.
EUR/USD option implied volatility is higher, with additional premium for topside strikes nL2N2N60QC, so options that benefit from further EUR/USD gains aren't cheap.
However, attaching a knock-out trigger to a plain vanilla EUR call/USD put takes advantage of that topside lean to significantly reduce the up-front cost, and by placing triggers above existing barriers, makes them less likely to be reached.
For example - 2-week expiry 1.2200 EUR calls give holders the right to buy EUR/USD at 1.2200 at expiry for an up-front cost of $72-pips, but add a 1.2350 knock out trigger and that premium is just $13-pips.
Strikes, triggers and expiries can be tailored to suit, but higher strikes, lower triggers and longer expiries will all lower the upfront premium.
Options are dead if the trigger is touched.
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