During the session on Friday, we saw the EUR/USD pair attempts to break above the 1.14 level, but as you can see struggled to break out. Because of this, we feel that this market will continue to see bearish pressure again and again, and therefore we are buyers of puts on short-term rallies. With the ISM Manufacturing PMI numbers coming out today, it is likely that we will see action in the US dollar, and if it is stronger than anticipated you can see an exacerbation of the downside in this particular pair. Regardless, we have no interest in buying calls because we feel that the resistance above is simply too strong.
EUR/USD
Looking at the S&P 500, we initially tried to fall apart during the session on Friday, but found enough support near the 2000 level to turn things back around and form a nice-looking hammer. Because of this, we believe that the S&P 500 will continue to grind higher, heading towards the 2060 level, and as a result we are buyers of calls on short-term pullbacks as the S&P 500 should continue to go much higher.
The precious metals markets slowed down during the session on Friday, as the Thursday session fell apart. That being the case, we feel that perhaps sitting on the sidelines and waiting to see what happens next will be the best thing we can do, but we do recognize that we could have support in this general vicinity, and as a result we could have a nice buying opportunity for calls. We will watch the daily chart in order to see whether or not we get the right supportive candles.