In this paper we present a new approach to realize flexible transparent strain sensors. It combines the use of transparent conductive fabric with polydimethylsiloxane (PDMS) through a simple and straightforward layer-by-layer assembly process. The conductive fabric is used to realize the transparent electrodes while the PDMS is utilized as both the substrate and encapsulation layers. As a concept demonstration, an interdigital capacitive sensor is designed and fabricated using the proposed approach. The fabricated sensor is then characterized in terms of its transparency and electro-mechanical nature. This is followed by the application of the sensor in several physiological sensing scenarios including the sensing of various body-part movements and tactile sensing. Apart from a high optical transparency (~70%), the sensor shows promising sensing results which validate the applicability of the proposed approach for realization of flexible and transparent strain sensors for wearable sensing applications.