During the day on Monday, the only thing that we will be paying attention to is the Bank of England and its interest-rate decision. You also have to keep in mind that there is the Asset Purchase Facility numbers coming out as well, meaning that this will be a very England centric type of session.
Looking at the GBP/USD pair, we broke much higher during the course of the day on Friday after the Nonfarm Payroll Numbers came out, as well as the UK elections. The 1.55 level offered resistance as we had anticipated, and then pulled back slightly. However, we believe that short-term pullbacks will offer call buying opportunities going forward.
The FTSE also broke higher during the day, clearing the 7000 level. It still looks as if we are trying to break out, so it’s difficult to imagine buying puts, but more than likely we are going to have to try to break out above the highs several times before actually succeeding in doing so. Ultimately though, we do believe that the FTSE goes much higher.