Looking at the Wednesday session, there isn’t much in the way of economic announcements. The United Kingdom Trade Balance numbers come out during the session, but that’s about it is far as we can see. There is an interest-rate decision coming out of New Zealand, which will be localized to the NZD/USD pair, and employment numbers coming out of Australia that could move the AUD/USD pair as well. Beyond that though, we don’t think that the markets move much.
Looking at the EUR/USD pair, it appears that we are going to continue to try to break above the 1.25 level, but ultimately it appears to be far too resistive. With that, we feel that buying puts on short-term charts will probably be the way going forward. We have no interest in buying calls, as the Euro continues to be one of the weakest performing currencies out there.
Looking at the S&P 500, we had a strong pullback during the session on Tuesday, but ultimately it appears that the market bounced hard enough towards the end of the day that in the end it should ultimately go higher. After all, the candle is a nice-looking hammer, we believe that a break above the top of the range for the Tuesday session should be a nice call buying opportunity.
Looking at the gold markets, we broke out during the session on Tuesday, as we start to head towards the 1250 handle. This is that area that we think that the sellers will come back into the markets, as the resistance is extraordinarily strong. In the meantime though, we believe the pullbacks on short-term charts should offer call buying opportunities as the market has shown pretty significant bullishness for the day. Ultimately though, this market is bearish though, so until we get a daily close above 1250, we have to consider that this market is essentially a market that is going for a correction and nothing more.
