The ZEW survey from Switzerland shows a decline in economic expectations for January, dropping from 6.2 to -4.7. This change raises worries about the country’s economic future. The EUR/USD pair fell below the 1.2000 support level, reaching new daily lows as the demand for the US Dollar rises ahead of the FOMC meeting. Meanwhile, GBP/USD also declined, dropping below 1.3800 due to renewed strength of the USD.

Gold Prices Near $5,300

Gold prices are approaching $5,300 per troy ounce as traders look for safe investments amid uncertainty before the FOMC meeting. The Bank of Canada plans to keep its benchmark rate steady at 2.25%, maintaining the cautious pause established in December. Tesla, Meta, Microsoft, and Apple are expected to influence the stock market, potentially boosting the ongoing AI rally. Bitcoin Cash is showing promise around $600, attracting renewed investor interest, which may lead to a double bottom reversal. By 2026, the forex market is likely to see top brokers emerge, focusing on cost-effective trading with low spreads and high leverage. More details are available on FXStreet.

Swiss ZEW Survey and Economic Change

There is a clear change in sentiment compared to early 2025 when the Swiss ZEW survey showed deep pessimism. The recent January data reveals a strong rebound in expectations to +12.5, the highest in two years. This improved outlook follows the Swiss National Bank’s rate cuts late last year and suggests a more stable environment for the franc. All eyes are on the Federal Reserve meeting this week, just as in early 2025. The Bank of Canada has reduced its rate from 2.25% to 2.00%, widening the policy gap. Traders in derivatives should be prepared for potential volatility in the US dollar, as any unexpected hawkish signals from the Fed may extend its recent gains. The dollar’s strength follows a trend from last year when EUR/USD fell below 1.2000. Today, with the pair struggling around 1.15, options markets indicate a preference for further downside protection ahead of the Fed. Similarly, the drop in sterling below 1.3800 in 2025 has continued, with traders now monitoring key supports near 1.3200. A year ago, gold hit new all-time highs over $5,300 per ounce as investors sought safety. This demand has cooled significantly, with prices now trading below $4,900. Traders should note that a less dovish Fed could further pressure gold, making short-term call options relatively inexpensive. The market is still dependent on Big Tech earnings to set the tone, a pattern from 2025. The Nasdaq 100 has started 2026 strong, gaining over 8% this month due to ongoing AI optimism. Expect significant volatility around this week’s earnings reports, creating opportunities for those trading straddles or strangles on major tech stocks. Create your live VT Markets account and start trading now.

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