With Chinese CPI numbers coming out today, it’s very likely that markets will adjust risk appetite based upon that particular announcement. While it’s almost impossible to trade a specific market due to this announcement, it can give you an idea of the general “feel” of the overall marketplace, and of course will drive world stocks higher or lower based upon the result.
With that being said, the EUR/USD pair fell during the course of the session on Friday as nonfarm payroll numbers came out better than anticipated. It appears now that the EUR/USD pair is ready to try to break down, so we are buying puts every time it rallies, or on a break down below the 1.13 handle as we believe ultimately this pair will head towards the 1.10 level.
EUR/USD
The S&P 500 try to break out during the session on Friday, but struggled at the 2060 level yet again. Because of this, we feel that the S&P 500 will more than likely pullback a bit, but only to find a more buying pressure below. Once we get supportive candles in this market, we are more than willing to buy calls. If we can get above the 2065 handle, we would be call buyers there as well. With no interest in buying puts in the S&P 500 at this point in time.
Gold markets fell drastically during the session on Friday as the US dollar climbed. With that, we are heading towards the $1220 level, an area that there should be plenty of support at. We are waiting for supportive candle in order to buy calls to express value in the gold markets, but we do not have a supportive candle yet. We are simply keeping our eyes open for that opportunity to take advantage of what should be a continuation of the recent breakout.