The session on Thursday will be dominated by interest-rate decisions, coming both out of the Bank of England and the European Central Bank. With that being said, the Bank of England is anticipated to hold steady on rates, but the statement will be parsed as per usual. However, we feel that the GBP/USD pair is a one-way bet to the downside at the moment, simply because traders are becoming very concerned about the possibility of Scottish independence and the damage that would do to the British overall economic situation. That being said, we believe that bounces from anything said will more than likely be nice selling opportunities.
The ECB comes out with a statement shortly afterwards, and this will be parsed very carefully because the market is trying to figure out what the European Central Bank is going to deal for the risks of deflation that are appearing in the European Union. Because of this, we believe that the EUR/USD pair will fall, and continue to go much lower. We still have a target of 1.28 in the longer term, but in the short-term recognize that any rally should be a nice selling opportunity on the short-term charts.
Later in the day, we have the Initial Jobless Claims coming out of the United States. This is anticipated to come out at 300,000 for the week, but at the end of the day we feel that the nonfarm payroll numbers on Friday will overshadow anything that this announcement can accomplish. That being the case, we feel that the stock markets in America will be nice markets to be involved in on pullbacks. We think that the S&P 500 has a floor in it at the 1990 level, and with the NASDAQ making fresh new high as over the last several days, we feel that both of those markets will more than likely be opportunities to go long on pullbacks as there should be plenty of supportive action below. On the other hand, the Dow Jones Industrial Average needs to break above the 17,150 level for us to be comfortable buying.
