The Eurozone’s CFTC EUR net positions fell to €162.8K from €1,575K. The EUR/USD finished the week around 1.1640, down 0.7% due to the strong US Dollar. Gold prices rose, exceeding $4,500, and are set for a 4% weekly gain following the US Nonfarm Payroll report. The EUR/USD may hit new lows of 1.1600 as the US Dollar continues to gain strength.

The GBP/USD and Cryptocurrency Market

The GBP/USD dropped below 1.3400 and is nearing its 200-day simple moving average at around 1.3380. Meanwhile, Bitcoin remains below its 50-day EMA at $90,000, and Ethereum stays above $3,000. XRP is facing pressure due to weak retail demand. In the coming week, the US CPI data could challenge the Dollar, along with expected increased communication from the Federal Reserve. Several brokers are recognized as top picks for currency trading in 2026, focusing on cost and platform features. The crypto market may see further declines as market sentiment grows cautious due to slowing demand.

The US Dollar and Market Volatility

The significant drop in net long Euro positions is a serious warning for the currency. This is a nearly 90% decrease in bullish bets by large speculators, indicating a possible trend reversal. Buying put options on the EUR/USD with strike prices below 1.1600 may be a strategic way to prepare for further weakness. The US dollar is currently dominant, and with the important Consumer Price Index (CPI) report due on Tuesday, we can expect increased volatility. In 2025, we saw similar pre-CPI concerns lead to sharp market swings of over 100 pips in one session. Therefore, buying call options on the US Dollar Index seems like a smart move, while defined-risk strategies can safeguard against unexpected data results. Gold’s strong rise above $4,500 an ounce, alongside a rising dollar, highlights deep market fear. This unusual price behavior, where gold and the dollar increase together, typically indicates a major flight to safety, similar to the geopolitical tensions we observed in 2024. We believe holding long positions in gold through futures or call options is advisable as it serves as a key hedge against uncertainty. The Australian and Canadian dollars appear weak due to the strong US dollar and disappointing economic news from their own countries. In Australia, inflation has missed expectations for two consecutive quarters, historically leading to prolonged weakness for the Aussie—as seen in early 2025. This makes selling the AUD/USD pair attractive, while the Canadian dollar will likely face ongoing pressure as oil prices struggle to remain above $70 a barrel. Create your live VT Markets account and start trading now.

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