Looking at the Monday session, there is almost nothing in the economic announcements that should move the markets. Because of this, we believe that it is essentially going to be a technically driven market during the day.
The EUR/USD pair broke higher during the course of the session on Friday, but simply remains in a consolidative state. Nonetheless, the market looks like it’s going to continue to have quite a bit of bearish pressure on it, so having said that we are looking for put buying opportunities on short-term charts. We believe that eventually the market should head down to the 1.05 level yet again and every time this market has rallied, the market recognizes it as value in the US dollar.
The S&P 500 broke higher during the session on Friday, essentially showing that we will in fact break above the top of that was put in the market recently. Because of this we look at short-term pullbacks as an opportunity to buy calls in a market that should continue to go much higher over the longer term. We believe that the stock markets are in fact healthy, and the recent pullback has done nothing but offer value.
Gold markets broke higher during the course of the session as well, finally clearing the 1180 level. With that, it looks like we’re heading to the 1200 level next, and with that we are bullish and buying calls going forward. Pullbacks continue to offer value in gold as we believe the market is trying to form a bit of a base.