During the Wednesday session, without a doubt the biggest thing that we will be paying attention to is the FOMC Minutes. That of course could give us an idea where the Federal Reserve is going as far as interest rates are concerned, and how it sees the overall economy. With that, we believe that the EUR/USD could be a very volatile. We recognize that the pair is at a major support level for the monthly time frame, as the 1.18 level below is massive support. If we break down below there, things could get ugly. In the meantime though, we believe that a move back above the 1.20 level is a call buying opportunity.
We recognize the gold rallied during the session on Tuesday, but still has to get well above the $1240 level in order to be a market that we want to buy calls in. In fact, we would not be surprise at all to see some type of resistant candle between here and there that we can serve buying puts as a result of.
The S&P 500 had a fairly negative session, but did close above the 2000 handle. Because of that, we believe that any supportive action in this general vicinity is probably going to be a call buying opportunity, especially if it is in reaction to something that the FOMC says later on in the day. Simply put, this is a market that is a bit oversold recently, so we wouldn’t be surprise at all to see it bounced from here.
