Looking at the Friday session, without a doubt the only thing that matters is the nonfarm payroll number. However, we recognize that the overall direction of the markets is at a very important level in general right now, so we need to pay attention to a couple of markets.
The EUR/USD pair fell below the 1.18 level at one point in time during the session on Thursday, but having said that it’s very well supported at that area, based upon monthly chart. In other words, if you break down below the bottom of the range for the session, this market falls apart. In that case, we would be buying puts hand over fist. On the other hand, if you break above the top of the hammer for the session, more than likely this market heads to the 1.20 level offering call buying opportunities.
Looking at the S&P 500, you can see that we broke higher during the course of the session on Thursday, and it now looks like we can buy calls on pullbacks. We would use short-term charts to do so, as we think the market will now head to the 2100 level.
Looking at the gold markets, the market appears to be stuck just above the $1200 level. However, there is a significant amount of resistance at the $1220 level as well though, so we think short-term trading opportunities will be the only ones you find. However, some type of shock announcement for the nonfarm payroll numbers could have this market break out in either direction. If the numbers are essentially what we expect, look to range bound trading to be the norm during the Friday session.