Looking at the Monday session, there isn’t much to push the market around as the Friday session would certainly be the focus. After all, the employment numbers out of the United States would move the markets in general, as they were a little bit stronger than anticipated. However, at this point in time it doesn’t seem as there were major move so therefore we feel that there will be a continuation of the overall themes.
Looking at the EUR/USD, we continue to hang about the 1.18 level, and therefore we think that the market is still trying to decide what to do. Ultimately, this could be the bottom of the downtrend. If you look at the monthly charts, this is an area that has been massively supportive. With that, we would buy calls above the top of the candle that formed the hammer on Thursday, aiming for the 1.20 level. On the other hand, if we break down below the bottom of that hammer, it’s very likely that this market will start another leg lower.
Looking at the gold markets, it appears of the $1240 level will be resistive, and therefore we believe that sooner or later we will find the right resistive candle to start buying puts again. That fits in with the theme of the stronger US dollar, but we also recognize that if we get above the $1240 level, this would be a very strong sign for the yellow metal.
Looking at the S&P 500, very little was accomplished during the session on Friday, and as a result we believe that this market is trying to figure out what to do next. With that being said, we believe that there will be a pullback but it should end up being a decent call buying opportunity in our opinion. Because of this, we will be patient but we will buy supportive candles below. We feel that this market will ultimately head towards the 2100 level.