During the session on Friday we expect very little in the way of economic announcements to affect the market, with perhaps the one exception being the GDP numbers coming out of the United States. This of course will affect the S&P 500, the US dollar, and all things American.
The S&P 500 initially fell during the course of the session on Thursday, but found enough support at the 2040 level to turn things back around and show some positivity. Because of this, we believe that short-term pullbacks will continue to offer call buying opportunities and we are buyers of supportive looking candles. With this, we believe that ultimately this market will break out to the upside and continue to go much higher, but in the meantime we recognize that volatility could still be the rule.
Looking at the EUR/USD pair, we have certainly found quite a bit of resistance of the 1.10 level yet again, and it now appears that level is offering far too much resistance for the buyers to overcome. Because of this, we continue to buy puts on short-term rallies that show signs of resistance. We believe ultimately that if we can get below the 1.09 handle, the EUR/USD pair should then head back down to the 1.05 handle.
EUR/USD daily chart
Gold markets of been very volatile during the session on Thursday, and as a result we believe that it is still going to be a very difficult market to trade. However, we recognize that if we can break above the 1220 level, this would in fact be a major breakout and a massive call buying opportunity. If we break down below the 1180 level, we feel that puts will be bought hand over fist at that point.