Looking at the Thursday session, the first thing that you need to keep in mind is that it’s Thanksgiving. Because of this, we anticipate that almost all of the action will be found during the European session, and that any remaining markets that are open later in the day should be avoided.
That being said, we are looking at the German employment numbers as it could be a harbinger as to which direction the EUR/USD pair goes, as well as the DAX. All things being said, we believe that the 1.26 level will be an excellent area to start buying puts in the EUR/USD pair, and that the €10,000 level should create some type of pullback in the DAX which will look at as value. That value is a call buying opportunity as far as we can see, and we do like the DAX overall. We do believe that the DAX breaks above the €10,000 level, but it may take a bit of momentum building at lower levels as we have gone so high so quickly.
Looking at the GBP/USD pair, we believe that we could start to see a bit of a rally to the 1.60 level, and based upon longer-term charts we are actually okay buying calls for once. We think that the next several moves will be higher, but keep in mind that it is going to be volatile nonetheless.
We also believe that the precious metals will continue to sell off but we do not have the right resistive candles yet the start selling gold, which is at the $1200 resistance barrier. Silver on the other hand needs to get closer to $17 for us to start selling but we recognize that neither one of these markets can be bought. We are buyers of puts only in the precious metals markets as the US dollar should continue to strengthen overall.
