The S&P 500 and Nasdaq rose after the FOMC decided to cut rates, adding $40 billion to the economy each month. However, the S&P 500 could not maintain these gains overnight and fell to 6,820. This decline was due to cautious market reactions following comments from Powell. The Federal Reserve cut rates by 25 basis points, setting a new target range of 3.50–3.75%. This led to a drop in the US Dollar, with gold prices climbing above $4,250. Meanwhile, stocks and cryptocurrencies like Solana faced pressure.

Effects of US Employment Data

The GBP/USD pair rose above 1.3400 after disappointing US employment data. The EUR/USD climbed past 1.1730, also due to weaker US job figures. Despite the Fed’s measures, the Dollar Index kept falling. Various assets are changing, with AUD/USD nearing yearly highs and NZD/USD rising for the fifth day. Gold is close to its all-time high, and there’s a focus on finding the best brokers for trading in 2025, which can provide insights into different markets and platforms. FXStreet warns about risks and does not endorse buying or selling assets. Readers should do their own research due to the risks and uncertainties in financial investments.

Market Strategy and Opportunities

With the Fed’s recent rate cut to 3.50-3.75%, we are in a period of confirmed monetary easing. This policy, along with the new $40 billion monthly QE program, indicates a bearish outlook for the US Dollar. The market appears to be focusing on actions rather than the Fed’s cautious tone, which will shape our strategy in the coming weeks. The US Dollar’s weakness is a major trend, providing clear opportunities in key currency pairs. The EUR/USD has broken above 1.1730 while GBP/USD cleared 1.3400, driven by soft US employment data, including an Initial Jobless Claims rise to 255,000. Options strategies favoring further depreciation of the dollar, like buying calls on these pairs, look promising. In equities, the S&P 500 has been volatile, briefly surging past 6,870 before retracting, a typical reaction after major Fed announcements. This level is critical for index futures traders; if it holds above, the rally may continue, but another drop could attract short-sellers. We saw similar fluctuations during the Fed’s policy changes in 2019 before clearer trends emerged. Gold has been exceptional, soaring above $4,250 an ounce as lower yields and a weaker dollar create a favorable environment for it. This growing trend aims for record highs around $4,380. We should think about using call options to capitalize on this momentum while managing our risks. Commodity currencies are also experiencing gains, with AUD/USD testing yearly highs and NZD/USD showing consistent strength. However, some technical indicators suggest that the Aussie dollar may be overbought. It might be wise to wait for a slight pullback before entering new long positions in these pairs. Create your live VT Markets account and start trading now.

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