The Euro (EUR) is currently down by 0.2% against the US Dollar (USD), reaching local lows around 1.15. It is performing moderately among the G10 currencies. Limited news and neutral comments from the European Central Bank are coinciding with the USD’s renewed strength. The EUR’s relationship to spreads shows a market focusing on the outlook of central bank policies. The US-Germany 2-Year yield spread remains stable, despite a hawkish stance from the Federal Reserve affecting the EUR. The Relative Strength Index (RSI) for the EUR is nearing the oversold level, with the currency trading between 1.1450 and 1.1550. The Euro has dropped below the 1.1500 support level for five consecutive days due to the USD’s strong performance. As the week continues, attention will shift to the US ADP report and the ISM Services PMI, both of which could affect the currency’s movement further. The British Pound (GBP) is also declining, reaching new lows near 1.3020, influenced by comments from Chancellor Rachel Reeves about borrowing costs. Meanwhile, gold prices have dipped to three-day lows near $3,930 per troy ounce, pressured by the stronger USD and changing expectations for a Federal Reserve rate cut. The Euro continues to hit new lows around 1.15 as the US dollar rallies. The main factor is the difference in central bank policies. Recent data shows US inflation in September 2025 at 3.4%, while Eurozone inflation has dropped to 2.1%. This leaves the Federal Reserve with little room to ease policies compared to the neutral European Central Bank. For traders who expect this downtrend to persist, buying EUR/USD put options with strike prices below 1.14 may be a smart choice. In the summer of 2025, significant support formed around the 1.1420 level, making it a potential target. The Cboe EuroCurrency Volatility Index (EUVIX) has increased from 6.5 last month to 7.8, indicating that traders are beginning to anticipate bigger moves. As momentum indicators like the RSI approach the oversold area, we may see a pause in the decline in the coming weeks. Traders expecting the EUR/USD to consolidate between 1.1450 and 1.1550 could consider selling volatility through strategies like an iron condor, which benefits from stability, especially if the upcoming US jobs data on November 7th does not bring a major surprise. This strength of the US dollar is affecting other assets too. Gold has struggled to remain above $3,950 per ounce, and bearish options on gold futures might be worthwhile. Similarly, with GBP/USD falling below 1.30, put spreads on the pound could capitalize on its weakness against the dollar.

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