EUR/USD is steady around 1.1650 as Isabel Schnabel from the European Central Bank (ECB) shows confidence in potential rate hikes. The swaps curve indicates that ECB rates will likely stay at 2.00% over the next year, with a possible increase of 25 basis points in the following two years. For EUR/USD to move higher, it needs to break through the resistance level at 1.1690. Investors are cautious as they await an important Federal Reserve policy meeting, causing EUR/USD to remain stable after two weeks of gains. The US Dollar is gaining strength due to increased risk aversion, making it hard for GBP/USD to gain traction. Gold is down, staying below $4,200, as traders prepare for the Fed meeting, which could shift short-term policy perspectives. Cryptocurrencies like Bitcoin and Ethereum are seeing slight recoveries, supported by strong retail demand, even with ETF outflows. Silver has reached a new all-time high, contrasting with gold’s decline and a reversal in mining stocks, suggesting different trends in the market. FXStreet provides insights that come with risks and uncertainties. This information should not be taken as advice to buy or sell assets. It’s crucial to conduct thorough research since investing in open markets carries risks and possible losses. Currently, the EUR/USD pair is holding steady near 1.1650, backed by the ECB’s hints at future rate hikes. This is a significant shift from the ongoing rate-cutting cycle we experienced throughout 2024. Recent Eurostat data shows that headline inflation in November 2025 rose to 2.3%, supporting the notion that the ECB’s easing phase is behind us. For derivative traders, the 1.1690 resistance level is key. With the upcoming Federal Reserve meeting likely to stir up volatility, buying short-dated call options with strikes above 1.1690 may be a smart move to prepare for a bullish breakout. However, the cost of these options will be high due to market uncertainty. The overall market is cautious, resembling the consolidation periods we saw in late 2023 before major central bank policy changes. The U.S. Dollar Index (DXY) has risen 0.5% in the past week, reaching 104.20, indicating that traders are getting ready for the Fed’s decision. This tense atmosphere might make strategies like straddles or strangles—profiting from significant price movements in either direction—worth considering for major pairs. In the commodities sector, gold is facing pressure from the rising dollar, dropping below $4,200 an ounce. This high price, driven by years of central bank buying and ongoing geopolitical risks, makes it sensitive to changes in Fed policy. Traders with long positions might consider buying put options as protection against a statement from the Fed that is more hawkish than expected. We are also noting a unique trend where silver has recently reached a new all-time high while gold has not. This is likely due to strong industrial demand or unique speculative interest affecting the silver market. This creates opportunities for pair traders who use the gold-silver ratio, which has now fallen to its lowest level since early 2024, to bet on whether this disconnect will continue or revert.

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