Without a doubt, the biggest announcement during the session today is the Core CPI numbers. This will have the market focusing on the US dollar, and US stock markets in general. With that being said, we look at the following markets.
The WTI crude markets continue to bounce around in a relatively tight range. We are essentially in the middle of that range, as we see the $61 level on the top, and the $57 level on the bottom being the influential range markers. With this, we are simply looking to find a little bit of a bounce closer to the $58 handle in order to begin buying calls as we continue to range trade.
The GBP/USD pair continues to move much higher during the course of the week, and we believe that it is now going to target the 1.58 level. We look for short-term pullbacks in order to buy calls as we should head towards that area. We have no interest in buying puts, as the British pound has been extraordinarily strong.
The DAX continued to look a bit soft during the session on Wednesday, as the market is currently testing a support area. With that being said, we are bit hesitant to start buying puts at the moment as there has been a significant amount of consolidation in this region before. We are much more comfortable buying calls, but we need to see a bit of a bounce first.
The Euro moved higher against the US Dollar. We favour of buying call options. Near-term resistance is at 1.1465, with a break above that on a daily closing basis exposing the resistance level at 1.1869 the 161.8% Fib. In case of a move below the support level at 1.1156, we could be buyers of puts. Keep in mind that today is the Eurogroup Meeting and we expect big volatility for the EUR/USD.
The US Dollar moved lower against the Swiss Franc. We would be buyers of puts for the USD/CHF. Near-term support set the trend-line at 0.9131, with a break below that on a daily closing basis exposing the next level at 0.9070. In case of a move above the downward trend-line at 0.9389, we could be buyers of calls until the resistance level at 0.9470.
The New Zealand Dollar moved lower against the US Dollar, with that in mind we favour buying put options. Near-term support is at 0.6890, with a break below that exposing the 161.8% Fib at 0.6812. In case of a move above the resistance level at 0.7020 opens the way for a challenge for the 0.7120 and we could be buyers of calls options.
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