Investors are brushing aside the higher than expected Unemployment Rate since the number seems to have been priced in by weeks of disappointing Unemployment Claims data. Bulls are fighting to end the summer on a high note as investors get ready for the Labor Day holiday weekend. We recognize a nice pop in both the EUR/USD and GBP/USD while gold trades just under its highly psychological $1000/oz level. Additionally, the 30 Year T-Bond futures are experiencing a sizable pullback.

Therefore, the S&P’s correlations are cooperating with the jump in U. S. equities. However, the EUR/USD and GBP/USD face their respective 3rd tier downtrend lines and $1000/oz should prove to be a challenging barrier for gold. Therefore, the S&P futures may not get enough juice to experience a technical breakout to the topside. On the other hand, the futures may look to bounce towards our 1st tier uptrend line, roughly 1% above present price.

Despite today’s encouraging performance in the S&P futures, 1000 should continue to play an important psychological role for the time being. Investors shouldn’t forget the surge in sell-side activity during Tuesday’s pullback. Hence, there remains a noticeable downward pressure since many analysts believe U. S. equities may be overbought. Meanwhile, Our EUR/USD and GBP/USD trend lines are approaching their respective inflection points, indicating the possibility of a period of high volatility. There are certainly enough headlines to warrant such an assumption. Besides the G20 Summit, OPEC Meetings, and a BOE monetary policy decision, we will receive a large wave of economic data from the U. S., Britain and China. Investors will be honing on Thursday since China will be releasing its Trade Balance and Industrial Production data. Uncertainty surrounding the growth rate of the Chinese economy has caused noticeable volatility over the past few weeks. Therefore, investors will be paying particularly close attention to Thursday’s data to see whether the Chinese economy is in fact cooling down as some analysts speculate.

Meanwhile, investors are sitting on the fence waiting for a clear breakout in either direction. Any recent sizable movements have been met by durable supports and resistances, exemplifying investor indecisiveness. We believe the choppy action could continue until we receive clear indicators regarding which direction the economy is headed. Summer doldrums are still in effect, though next week’s economic events could result in a turning point.

Price: 1013

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