The Monday session features very little in the way of economic announcements that we will be following, with perhaps the Existing Home Sales in the United States being a standout, as well as the Australian CPI numbers. Nonetheless, we believe that the market should continue to follow technical analysis as per usual, so therefore we are looking at a couple of possible setups.
The EUR/USD pair continues to bounce around the 1.28 handle, but we believe that there will be some type of resistance to be found between the 1.28 level on the bottom, and the 1.30 level on the top. Ultimately, a resistant candle has us buying puts as the Euro should continue to weaken over the longer term.
The S&P 500 continues to struggle with the 1900 level, but will eventually break out above that level. On a move above 1900, we are buyers of calls as we believe the S&P 500 will continue to strengthen, and if the Existing Home Sales comes out at more than 5.10 million for the month of September, we could very well see that as the reason to start going higher.
Silver markets look weak, as the $17.50 level continues to offer significant resistance. However, gold markets are trying to break out above the $1250 level, so we do see a little bit of back and forth and fusion in the metals market, as it to typically follow each other, but don’t necessarily have to. The attention to both of these markets as we may get a little bit of a divergence between the two.
The FTSE looks like it’s pulling back a little bit, but quite frankly we want to see supportive candles on short-term charts in order to buy calls, and would most certainly do so if we can get above the 6400 level, an area that has been significantly resistive lately.