The meeting between Trump and Putin in Alaska didn’t yield significant results. Ukraine’s President Zelensky will meet US President Trump again, this time joined by European leaders, to avoid past mistakes. Market sentiment is calm as the week starts. The dollar is stable after slight declines, following US retail sales meeting expectations. US futures show minimal changes with slight gains, as major retailers like Target and Walmart prepare to release their earnings.

Cryptocurrency Movements

Cryptocurrencies are fluctuating, particularly Ethereum, which has dropped to $4,320. This is the first time it has fallen below key hourly averages in two weeks after failing to break through $4,800. Today’s European trading is expected to be quiet in terms of data. However, attention will turn to the RBNZ meeting, Fed minutes, and UK CPI and PMI data. These events, along with the upcoming Jackson Hole symposium, are likely to impact the market. With a quiet start to the week, we should monitor for signs of increased market volatility related to the upcoming meeting between Trump, Zelensky, and European leaders. Geopolitical tensions, similar to when the VIX index soared over 30 during uncertainty in early 2022, can lead to unpredictable market moves. Traders might consider buying VIX call options or puts on broad market indices as protection against a negative outcome from these discussions.

Fed Minutes And Market Implications

It’s essential to focus on the Fed minutes and the Jackson Hole symposium, especially since markets are scaling back expectations for a rate cut. The CME FedWatch Tool now indicates less than a 20% chance of a rate cut by year-end, down from over 50% last month. This suggests we should be ready for hawkish signals, which could strengthen the dollar. Traders might consider selling out-of-the-money call options on EUR/USD. Earnings reports from major retailers like Walmart and Target will provide insight into the health of US consumers. Last month’s retail sales showed a modest 0.2% increase, while the University of Michigan Consumer Sentiment survey dropped to 65.5, indicating growing consumer anxiety. An options straddle, which profits from significant price movements in either direction, might be a smart strategy to trade these stocks during their earnings reports. Looking ahead, the week is filled with market-moving data that could disrupt the current calm in currency markets. With UK inflation data expected this week and predictions that the core rate will stay above 3.5%, we may see increased volatility in the GBP/USD pair. We can prepare for this by considering short-dated options to capture any sudden price changes after the release. The evident weakness in Ethereum, as it falls below important technical levels, offers a direct opportunity for crypto derivatives traders. After failing to lift past the $4,800 resistance, momentum has clearly shifted, and the Crypto Fear & Greed Index has dipped back into “Fear” territory with a value of 38. We view this as a cue to explore buying put options or setting up bearish call spreads on crypto-related assets. Create your live VT Markets account and start trading now.

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