Looking at the upcoming session for Tuesday, there’s very little on the economic calendar to move the markets. One outlier might be the Reserve Bank of Australia releasing its Meeting Minutes, which if there is an underlying fear for the growth of the global economy, it could move the stock markets worldwide. However, more than likely it will be a fairly quiet event when that announcement is released.
Looking at the EUR/USD, the pair looks as if it is currently attracted to the 1.0750 level more than anything else. We believe that the 1.08 level above is resistive, and we also believe that the 1.10 level above there is even more resistant. With that, we are looking for an opportunity to buy a puts as the market should continue to fall. Ultimately, the 1.06 level below is supportive, and that is our target given enough time. Buying puts is the only trade that we have in mind, especially on signs of weakness.
Looking at the GBP/USD pair, we broke down below the bottom of the candle from the Friday session which of course was a shooting star. Because of this, it looks as if the market could very easily break down from here, and on a move below the 1.49 level we are buying puts as the market should then head to the 1.46 handle over the longer term. Expect volatility on the way down though.
GBP/USD
Gold markets continue to go back and forth, currently bound buy the 1180 level on the bottom, and the 1220 level on the top. Ultimately, we believe that buying calls closer to the 1180 level on short-term supportive candles is the most likely move for today. We have no interest in buying puts yet, as the risk outweighs the rewards. On a move below the 1180 level however, we would start buying puts.