The ISM Services Prices Paid index in the United States fell from 65.4 to 64.3 in December. This index measures the prices paid in the services sector. Alongside this, there were mixed movements in the market. WTI oil prices dropped, while gold prices stabilized around $4,450 per ounce.

The US Dollar and Currency Pairings

The US Dollar remained steady, impacting different currency pairings. The GBP/USD decreased to daily lows near 1.3470, while the EUR/USD stayed below 1.1700. In the cryptocurrency market, Bitcoin’s value fell below $93,000. Other cryptocurrencies like Ethereum and Ripple also faced challenges due to market conditions. The overall economic outlook suggests a stable path for 2026 after a volatile previous year. Investors may proceed cautiously, mindful of ongoing market risks. FXStreet offers market insights but stresses the importance of doing thorough research before making any investment decisions. They do not provide personalized investment advice.

Options Strategies and Market Volatility

The decrease in the ISM Services Prices Paid index to 64.3 indicates easing inflation, which we’ve been monitoring. However, this contrasts sharply with last week’s strong non-farm payrolls report for December 2025, showing 210,000 new jobs and an unemployment rate of just 3.8%. This mixed data creates uncertainty about the Federal Reserve’s next actions, making directional bets risky. In this environment, options strategies that benefit from volatility rather than direction seem promising. The US Dollar is unclear, and with the December Consumer Price Index (CPI) data expected next week, a breakout is likely. We are employing strangles on currency pairs like EUR/USD, currently below 1.1700, to prepare for a significant move in either direction. Gold is caught between a strong dollar and falling Treasury yields, holding it close to $4,450 an ounce. After major shifts in 2025, the market is cautious, and we’re likely to see this range continue. Selling covered calls against existing gold positions or using iron condors on gold futures could generate income during this sideways price trend. Equity market volatility is surprisingly low, with the VIX around 18, below the historical average. We see this as a good chance to buy protection cheaply before the Fed meeting in late January. Buying VIX call options or puts on the S&P 500 can help hedge against a market still adjusting to last year’s significant economic changes. The crypto market is also showing signs of tiredness after a strong rally, with Bitcoin retreating from nearly $95,000. This looks to be a healthy consolidation phase as the market digests the substantial capital inflows seen throughout 2025. During this pause, we are selling out-of-the-money call spreads on both Bitcoin and Ethereum, betting that the upward momentum will be limited in the short term. Create your live VT Markets account and start trading now.

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