EUR/USD has risen above last week’s high of 1.1720. This increase is linked to speculation that demand for the euro is driven by moves away from stocks, government bonds, and credit assets. There is a rising interest in euro-denominated products, prompting issuers to respond. Technical indicators show possible support for EUR/USD after several weeks of stability. However, if USD/JPY stays steady and US housing data improves, EUR/USD might fall back to around 1.1680.

Expectation For EUR/USD

EUR/USD is retracing towards 1.1700 as the US Dollar gains demand. This is partly due to optimism about a new trade agreement between the US and Japan. The US President announced 15% tariffs on imports that will influence various markets. GBP/USD is steady around 1.3550, reflecting positive market sentiment. The US-Japan trade deal boosts the Pound, while the US Dollar struggles to maintain momentum, affecting currency trades. Gold prices remain low, despite a slight recovery from earlier lows, as optimism around the US-Japan trade deal reduces safe-haven demand. Meanwhile, BNB has reached a new high of $804.70, surpassing Solana’s market cap and raising its value to over $110 billion. Six months into President Trump’s second term, we see significant policy changes, but the markets remain stable. His administration maintains an “America First” approach across trade and national defense.

Opportunity In Current Market Conditions

We view the current fluctuations in EUR/USD as a chance to sell options. With Eurozone inflation reported at 2.4% and the European Central Bank hinting at possible rate cuts, the euro’s potential for growth seems limited against a dollar supported by a cautious Federal Reserve. This sets up an opportunity to sell call options with a strike price above 1.1750, allowing for premium collection. The pound’s stable movement around 1.3550 shows a market awaiting a catalyst. As the Bank of England keeps rates steady amid ongoing services inflation, we do not expect significant movement in either direction. Therefore, we are considering iron condors on GBP/USD, a strategy aiming to benefit from low volatility and a consistent price range. The decline in gold prices is linked to the strength of other assets and rising government bond yields, especially with the 10-year US Treasury yield above 4.4%. As long as trade deals foster this risk-on sentiment, we anticipate more pressure on non-yielding safe havens. We are planning to buy put options on gold futures, expecting a test of lower support levels. In the cryptocurrency market, the rise of BNB, which now leads the market cap by over $40 billion, indicates strong momentum. This high-volatility environment leads us to consider long-dated call options to capitalize on this trend while minimizing potential losses. Our objective is to take advantage of current speculative interest without risking too much capital. The President’s “America First” policy typically leads to market fluctuations, similar to the spikes seen during the 2018-2019 trade disputes. This creates an excellent opportunity for long volatility strategies, like buying straddles on major stock indices such as the S&P 500, to hedge against sudden policy changes that could swing market sentiment. Create your live VT Markets account and start trading now.

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