Looking at the Friday session, there’s very little to move the markets beyond the Manufacturing Production numbers in the United Kingdom. That being the case, the market should focus on the FTSE and the British pound, but we will have to wait and see whether the numbers can come out higher than the anticipated 0.4% number. If that’s the case, we believe that both the FTSE and the British pound will go higher.
The GBP/USD pair broke down during the session on Thursday, as the 1.4750 level below is massively supportive. If we can get below there, the market should then go to the 1.45 handle next. That being the case, the market should remain bearish, and even if we rally at this point in time, we believe that there is massive resistance at the 1.50 level, so we are only buying puts at this point in time anyway.
The FTSE broke out to the upside during the session on Thursday, testing the top of the shooting star from Wednesday. If we can break above there, the market should then go to fresh, new highs. Any pullback at this point in time should be a call buying opportunity. With that, the market should continue to go higher given enough time, and as a result we have no interest whatsoever in buying puts.
The EUR/USD pair continues to break down, as it is approaching the 1.07 level. If we can get below there, the market should then head to the 1.05 handle, and then possibly even parity after that. Any rally at this point in time should be a put buying opportunity given enough time, and we believe that the 1.10 level above should continue to be very resistive.