Strategic Insights Amid Market Changes

Trading forex on margin can be risky. It’s important to carefully consider your financial goals and experience before investing. Only use money that you can afford to lose, as the leverage in forex trading can lead to bigger losses. Recent weak US employment and PMI data suggest that the dollar may struggle in the coming weeks. The July Non-Farm Payrolls report showed only 85,000 new jobs, far below the expected 190,000. This information makes shorting the dollar against other currencies look promising. We expect the Euro and the British Pound to remain strong against the dollar. The rise of EUR/USD past 1.1550 and GBP/USD above 1.3250 reflects this dollar weakness. Traders might want to buy calls on these pairs to take advantage of any further gains. Gold is becoming more appealing as US Treasury yields drop, with the 10-year yield now around 3.10%. The market is now less likely to expect a Fed rate hike this year, making gold at $3,350 attractive. This pattern is similar to what we saw in early 2020 when expectations of lower rates helped boost precious metals.

Eurozone Prospects and Crypto Movements

The economic outlook for the Eurozone seems bright, but we should keep an eye on the European Central Bank. The latest inflation data for July 2025 has decreased to 1.8%, falling below the ECB’s target for the first time in over a year. This drop might lead to an unexpected rate cut later this year, which could create volatility for EUR-based trades. Singapore’s manufacturing PMI slipping to 49.9 is a warning for Asian markets, showing a wider regional slowdown. Similar trends in recent trade data from South Korea and Taiwan suggest caution for long positions in Asian equity indices for now. In the crypto market, we are noticing signs of a pullback after a strong July. Bitcoin dropping below $115,000 is notable, and the 15% decline in futures open interest indicates traders are booking profits. This could be a good time to consider protective puts or wait for a clearer support level before opening new long positions. With these mixed signals, managing risk is crucial. High leverage in forex and derivatives can lead to quick losses as well as gains. We should only trade with money we’re ready to lose and use stop-loss orders to safeguard our positions. Create your live VT Markets account and start trading now.

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