With almost nothing to push the market around on Monday, the only thing we can do is look at the charts for potential trade setups. The EUR/USD pair fell all the way down to the 1.20 level, which of course has been a massive support level over the longer term. With that being the case, we are looking to the 1.20 level as a very important level. The simple fact is that the EUR/USD pair is going to have to make some type of decision at this area. We are waiting to see what the daily candles are in order to make a play. This is an area that’s been very supportive over the last five years, so we are cognizant of the fact that the selling may be coming to an end here fairly soon.
With that being said, we believe that the gold market continues to bounce around between the 1170 and 1200 levels. With that being the case, we believe that this market is one that you can trade back and forth depending on which direction we go, as buying puts near resistance and buying calls near the support level will be the way to go going forward. Keep in mind it’s probably best to play short-term options only.
We are looking for the S&P 500 to pull back a bit more, so we will be watching for supportive candles in order to buy calls. We don’t really have anything right now to deal with or place a trade based upon, but we are certainly watching that market as it is significantly bullish overall. With that being said, expect fairly short-term trading to be the reality for the first couple of sessions during the new year.