Looking at the Thursday session, we believe that there could be a lot of volatility but ultimately the trend should prevail. In other words, we think that the EUR/USD pair will continue to offer put buying opportunities as the 1.26 level is of course a massively resistive. On top of that, there is plenty of resistance as well, extending all the way to the 1.28 level. With that, there’s no way to buy calls in the EUR/USD pair, and we believe that put buyers will continue to prevail over the longer term.
This is especially true considering that the US dollar will be greatly influenced by the Federal Reserve monetary minutes during the session on Wednesday, and any hints of tightening will send this market much lower. However, we could see a significant amount of volatility due to the German Manufacturing PMI numbers, especially in the DAX. With that, we are buyers of calls in the DAX as we believe it will go much higher eventually.
The FTSE also look like it’s ready to go higher as well, so we are buyers of calls in that marketplace looking for the 6900 level. Core Retail Sales could be a bit of a catalyst for the FTSE to go higher during the session as well, but ultimately the Wednesday session formed a perfect hammer, and that of course suggests that the buyers will still be in control. Ultimately, the FTSE continues to be a positive market overall.
The precious metals markets will continue to be a market in which we are buying puts, as the US dollar continues to go much higher. Ultimately, the gold and silver markets are both very bearish, and as a result buying calls in this marketplace is cannot be done.