With the Nonfarm Payroll announcement coming out on Friday, the Thursday session will be fairly quiet, but the ECB has an interest rate decision coming out, and that will move the EUR/USD pair. The statement will be the more important part, and the market will try to figure out what the next move is. (I don’t think that that the rate will be changed, but further QE could be in the works…) Either way, any rally in the EUR/USD pair should be an opportunity to buy puts as the 1.28 area should be massively resistive.
The S&P 500 fell on Wednesday, testing the 1950 area. This area is support, and the site of an uptrend line as well, so it is possible that a bounce could be coming. With this, we are looking for supportive candles in order to buy calls at this point in time.
The FTSE is heading towards the 6500 level, which is the bottom of the larger consolidation area that we have been in for several months. This area should offer an opportunity to buy calls on supportive candles. We have no interest in buying puts as the downside is somewhat limited at this point. The risk to reward ratio is excellent if we get any sign to start buying calls, so we like this trade.
The DAX looks as if it will fall to the 9400 level where it should find support. If not, the 9300 level will most certainly be an area that should attract a lot of attention in the future. Either way, we like buying calls on signs of support. The ECB adding stimulus could be a catalyst for the market to do so as well.
