New Zealand Dollar Gains

The New Zealand dollar has risen slightly against the US Dollar, approaching 0.5800, due to disappointing US manufacturing data. The EUR/USD pair is gaining momentum, moving above the 1.1735 level, while USD/CAD stays steady around 1.3750, influenced by oil prices. Gold is poised to benefit from possible interest rate cuts by the US Federal Reserve. Sui continues to rally with positive indicators, aiming for resistance at $2.34. Ripple’s price has climbed above $2.13, aided by ETF inflows and demand for derivatives. This increase shows a strong interest in risk assets within the cryptocurrency market, despite ongoing geopolitical issues. The sharp rise in net long oil positions, from 64.9K to 646K, signals strong bullish sentiment from large speculators. This suggests that many believe oil prices will significantly rise soon. Currently, WTI crude is trading over $95 a barrel, and this positioning implies a belief that prices could climb even higher, especially after OPEC+ extended production cuts into the second quarter. Given this strong outlook, we should consider taking or increasing long positions in crude oil derivatives. Buying call options on WTI or Brent futures could be a smart way to take advantage of expected price increases while managing risk. For those willing to take more risk, trading the futures contracts directly can offer more leverage on this trend.

Weakening US Dollar

This positive outlook is backed by a weakening US dollar, which is struggling to maintain the 98.00 level on the DXY index. This marks a significant drop from 104 early in 2024, mainly due to expectations of Federal Reserve rate cuts. With inflation for December 2025 coming in lower than anticipated at 2.8%, the market is now expecting a high chance of a rate cut by March. As a result, we should explore opportunities to short the US dollar against other major currencies. The EUR/USD pair is already gaining traction beyond 1.1735, indicating a continuation of the trend against the dollar. Selling USD puts or buying EUR calls could be a smart strategy to leverage this momentum. The Canadian dollar also deserves attention, as it is closely tied to oil prices. Although it has remained steady around 1.3750 against the US dollar, the major bullish positioning in oil suggests that the Canadian dollar is likely to strengthen. We should expect the USD/CAD pair to decline in the coming weeks. Lastly, let’s not forget the chaotic market conditions we faced throughout 2025. A significant risk factor on the horizon is the upcoming Supreme Court ruling on presidential tariff powers, which could create major market volatility. In this context, options strategies that benefit from price fluctuations, rather than just directional movements, are valuable additions to any trading plan. Create your live VT Markets account and start trading now.

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