The ISM Services New Orders Index in the United States climbed to 57.9 in December, up from 52.9 the month before. The EUR/USD exchange rate remains steady below 1.1700 due to lower inflation in the Eurozone, which is impacting the Euro. The US Dollar is hardly changing, even with positive data coming from the U.S. Meanwhile, GBP/USD is falling, approaching 1.3470, as the US Dollar sees slight gains after important data released in December.

Gold Prices And Market Impact

Gold prices are around $4,450 per troy ounce, after a three-day rally came to an end. This shift is due to a stronger US Dollar and decreasing US Treasury yields. The drop in gold prices may be limited for now. In the cryptocurrency market, Bitcoin has fallen below $93,000 after reaching $94,789 earlier this week. Altcoins like Ethereum and Ripple are also struggling due to weak market sentiment. Looking ahead to 2026, the economic outlook is uncertain. Current trends suggest no major changes from 2025 will repeat. Ripple (XRP) is facing selling pressure, trading at $2.22, as investors cash in on recent profits.

US Economy Momentum And Currency Strategy

The strong ISM services data, which shows an increase to 57.9, indicates that the US economy has significant momentum as we approach 2026. This supports the idea of a stronger US dollar, similar to the patterns observed in late 2023 when solid economic reports led to a multi-week rally for the dollar. Traders might consider buying call options on the dollar index or put options on pairs like EUR/USD, preparing for more strength in the greenback. With the Eurozone experiencing soft inflation, the gap between the US and European economies seems to be widening. Selling short-dated EUR/USD call options may be a smart way to earn income while expecting limited upside below the 1.1700 level. A similar negative outlook applies to GBP/USD, which continues to struggle against the rising dollar. Gold is in a balancing act between a stronger dollar and falling US Treasury yields, keeping prices around $4,450. This situation suggests that the metal might trade within a specific range in the short term. Since real yields dropped by over 40 basis points in late 2025, this creates a solid support level. Using an iron condor options strategy, which bets that gold stays between $4,300 and $4,600, could take advantage of this expected stability. The recent decline in Bitcoin and Ethereum from their earlier highs is typical profit-taking after a strong rally. We saw this happen after the 2021 bull run when markets cooled off for several weeks before gathering steam again. Buying protective put options on major crypto ETFs could be a wise way to safeguard long positions against a deeper dip towards $85,000 for Bitcoin. The calm in the markets contrasts with the shocks of 2025, suggesting that volatility may be underestimated. With the CBOE Volatility Index (VIX) currently near its 52-week low of 12.8, buying VIX call options is a cost-effective way to protect portfolios. This approach guards against sudden market swings that the broader economic outlook warns about. Create your live VT Markets account and start trading now.

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