1 – Looking at the GBP/USD pair, we broke down again during the session on Thursday, as the market is trying to reach towards the 1.4750 level. That area is massively supportive, and as a result if we can get below there the markets will come undone and head towards the 1.45 level. However, we see the 1.50 level is massively resistive, so any rally between here and there is a put buying opportunity as far as we can see.
2 – The EUR/USD pair is testing the 1.07 level, and if we can break down below there we should continue to go much lower, probably heading to the 1.05 handle. We believe that bounces should be an opportunity to start buying puts on signs of resistance as well, and as a result we are still bearish of the Euro.
3 – The DAX continues to go higher, and as a result we believe that pullbacks offer call buying opportunities. It’s only a matter of time before we get above the 12,200 level, and when we do the market should continue to go much, much higher. We have no interest in selling or buying puts, so having said that this is a bullish market as far as we can see. We believe that the market will continue to be very bullish over the longer term as the European Central Bank continues to offer liquidity to the markets. As a result, the Euro should continue to fall in general, and the European stock markets should continue to strengthen over the longer term.
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