The Euro (EUR) has risen by 0.5% against the US Dollar (USD), keeping pace with many other G10 currencies due to a general weakness in the USD. The EUR/USD has hit a two-week high above 1.1700 as traders expect a rate cut from the Federal Reserve. Attention is on Germany’s early inflation data and comments from Fed officials. Technical signals indicate a bullish trend, with support at 1.1650 and resistance at 1.1750.

Currency Movements

The GBP/USD pair is climbing as well, breaking through 1.3550. This increase is fueled by a weaker USD and a positive market sentiment linked to expectations of a dovish Federal Reserve. Gold remains in a good position but faces challenges gaining momentum, as safe-haven demand decreases despite rumors of rate cuts by the Federal Reserve. The US Dollar keeps falling as traders weigh the chances of a September rate cut. Artificial Intelligence tokens are gaining traction, especially with Perplexity’s $34.5 billion bid for Google Chrome. Bittensor (TAO), Near Protocol (NEAR), and Render (RNDR) are among the top performers. The Bank of England has recently lowered rates to 4%. While this move is significant, officials remain cautious about ongoing inflation issues. Meanwhile, trading foreign exchange carries high risks, and newcomers should be aware of these dangers. With the US Dollar continuing to weaken, we predict this trend will persist. The market is anticipating a Federal Reserve rate cut in September, which is boosting other currencies against the dollar. We should consider options strategies that take advantage of a declining dollar and increased currency volatility in the upcoming weeks.

Trading Strategies

Since the EUR/USD has moved above 1.1700, we see more upward potential towards the 1.1750 resistance level. It may be wise to buy call options on the euro to capitalize on this momentum while closely monitoring the upcoming German inflation data. A recent report indicates that Germany’s preliminary inflation for July 2025 is at 2.6%, which could make the European Central Bank cautious, adding complexity to our trades. The British Pound is also on the rise, and the recent rate cut by the Bank of England to 4% should be viewed as a sign of its future policy direction. Although this may weaken the pound over time, the current USD weakness is a stronger influence lifting GBP/USD. We recall a similar increase in late 2023 when markets first expected a Fed policy change, suggesting this momentum might continue. Gold is in a complicated position, currently trading around $2,350 per ounce. Typically, a weaker dollar boosts gold, but a strong risk appetite is limiting its appeal as a safe haven. We could use straddles, an options strategy that profits from significant price movements in either direction, to trade any potential breakout. The US Dollar Index (DXY) has dropped to 101.50, its lowest level in three months, supporting the weak dollar trend. This follows last week’s Non-Farm Payroll report, which indicated that only 150,000 jobs were added in July 2025, significantly below expectations. This weak employment data increases the likelihood of a September rate cut by the Federal Reserve. In the more speculative market segment, excitement around AI tokens like TAO and NEAR showcases a strong risk-on mentality. Given their high volatility, it’s wise to use derivatives to manage risk, such as buying protective puts against current holdings. This approach allows us to benefit from potential gains while minimizing losses. Create your live VT Markets account and start trading now.

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