Looking at the Wednesday session, we have a ruling coming out of the European Court of Justice that could massively impact the European Central Bank and its monetary policy. Essentially, they are trying to decide the legality of what the ECB is trying to do. Obviously, this can have a massive influence on the EUR/USD pair, which seems to be sitting on pretty massive support anyway. The 1.18 level is a big deal on the monthly charts, so therefore it would make sense for this pair to bounce. We believe that every time this pair bounces, it is offering a short-term call buying opportunity.
Looking at the S&P 500, it appears that we will continue to grind higher but we have to keep in mind that Retail Sales could move the markets as well. We believe that this market is heading to the 2100 level, so any pullback should be a call buying opportunity on signs of support. On the other hand, we continue to grind higher than current levels, it will simply be a trader to continue to buy calls. We have no interest whatsoever in buying puts.
The $1250 level is massively resistive in the gold markets, so if we fail there, and it looks like we are going to, a break below the bottom of the candle for the Tuesday session would be a very negative sign. In our opinion, it would be a put buying opportunity. On the other hand, if we broke above the $1250 level, that of course would be a rather bullish sign as the market should continue to go much higher at that point in time. With that being the case, the gold market will be worth watching and with the US Dollar Index looking a bit tired, and will be interesting to see exactly what happens.
