The United States Energy Information Administration (EIA) reported a decrease in crude oil stock from -0.961 million barrels to -6.858 million barrels in October. This decline occurs amidst various global economic changes affecting different assets and currencies. After the Federal Reserve cut interest rates, the EUR/USD fell below the 1.1600 support level. The US dollar gained strength following Chair Powell’s comments, which also influenced other currencies like the GBP, dropping to around 1.3140, its lowest point in six months.

Market Movements And Trends

Gold prices reversed previous gains, approaching $3,950 per troy ounce due to a stronger US dollar and rising Treasury yields. Ripple’s XRP rose past $2.65, as expectations grow for the Fed to ease policies further, possibly with a 25 basis point rate cut. The European Central Bank (ECB) is likely to keep its current policy at the next meeting, with only slight changes expected in growth forecasts. The Pi Network’s PI token remains above $0.2600, indicating potential for a breakout given strong market activity. Investors are encouraged to do their own research before making decisions. Investing carries major risks, including the chance of significant losses, so individuals should take responsibility for their investment choices. With the Fed indicating a pause in rate cuts, the US Dollar has risen significantly. Futures markets have quickly adjusted, with the odds of a December 2025 rate cut dropping from over 70% to under 20% within a day. This suggests that buying call options on the dollar index (DXY) or selling EUR/USD futures might be a key strategy in the coming weeks.

Crude Oil And Energy Markets

The significant drop in crude oil inventories, down 6.86 million barrels, is a strong bullish sign for energy prices. This draw is more than four times the five-year average for late October, indicating high demand or low supply. To take advantage of rising prices, consider WTI or Brent bull call spreads, but be aware that a stronger dollar could be a hindrance. In currency markets, the differences in central bank policies are becoming clearer. As the Fed adopts a more hawkish stance, the ECB is expected to remain steady, and speculation grows about a possible rate cut by the Bank of England. The widening gap between US and German 2-year bond yields, reaching its highest level since summer 2024, suggests further declines in EUR/USD and GBP/USD through put options. Gold’s drop to $3,950 results from renewed dollar strength and higher Treasury yields. This pattern resembles what we saw in late 2023 when the Fed kept a “higher for longer” approach, making assets like gold less appealing. It may be wise to sell gold futures or buy puts on gold ETFs until macro pressures subside. The Dow’s decline indicates that equity markets react negatively to the prospect of reduced monetary easing. The CBOE Volatility Index (VIX) has surged over 20% this week, rising from 14 to above 17, highlighting increased market uncertainty. To protect long equity portfolios, consider buying VIX call options or purchasing protective puts on major indices like the S&P 500. Create your live VT Markets account and start trading now.

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