Looking at the Thursday session, without a doubt the most important announcement coming out will be the Bank of England and its interest-rate decision. It’s not necessarily the interest rate decision that we see affecting the market, rather it will be the monetary policy statement that comes out at the same time. After all, this shows exactly what the BOE is looking at, and what its outlook for the economy going forward is.
GBP/USD Daily
Looking at the GBP/USD pair, you can see that we formed a nice-looking hammer for the session on Wednesday, this is normally a sign of strength, and we certainly recognize that the 1.50 level below will be supportive. Because of this, we are looking to buy calls on breakouts to the upside. We have no interest in buying puts unless we get well below the 1.50 handle.
It’s probably a bit much to ask the S&P 500 to move a lot during the session, especially considering that the nonfarm payroll numbers come out the very next day. However, we are more inclined to buy calls on breakouts above the 2030 handle. We also believe the pullbacks should offer value, so therefore we should continue going higher over the longer term.
Looking at the silver markets, we initially fell during the day, but found enough support to turn things back around and form a little bit of a hammer. With that being said, we feel that this market is going to grind its way up to the $17.50 level, but recognize that the US dollar will greatly influenced where silver goes.