The United States’ 5-year consumer inflation expectation for July stood at 3.4%, which is lower than the forecast of 3.6%. This information is part of a broader market analysis for general awareness. In the foreign exchange market, the EUR/USD pair climbed above 1.1550 due to weak US employment and manufacturing data. The GBP/USD pair also traded positively, staying above 1.3250 after bouncing back from six straight days of losses tied to disappointing US job numbers. Gold prices reached new weekly highs near $3,350 after US Treasury bond yields declined. The market is reevaluating the Federal Reserve’s interest rate outlook in light of the weak nonfarm payroll data. In the world of cryptocurrency, Bitcoin dipped below $115,000 amid rising liquidation pressures, even after a strong July. Investors are closely watching the $112,000 support level as the market faces bearish challenges. The Eurozone is holding strong this summer, thanks to the EU-US deal and increased spending in Germany. While there are still some risks, a potential final interest rate cut could take place later this year or early in 2026, depending on wage trends. Given the weak US jobs report and lower-than-expected inflation, we think the Federal Reserve will avoid raising interest rates further. The latest nonfarm payroll figures for July 2025 showed only 95,000 jobs added, well below the expected 180,000. Because of this, we are looking into derivative strategies that could benefit from a pause or future rate cut. As a result, we favor taking long positions on foreign currencies against the US dollar. We see value in buying call options on the EUR/USD and GBP/USD pairs to take advantage of their upward trend. This is similar to the dollar weakness we saw in mid-2023 when the Dollar Index (DXY) dropped significantly over several months due to similar economic indicators. The Eurozone’s strength, highlighted by its latest Composite PMI reading of 52.8, stands in contrast to the US PMI, which recently fell into contraction at 49.5. This economic disparity supports our positive outlook on the Euro. Therefore, we should consider strategies that favor European assets over US ones. We also expect gold’s surge to continue as US Treasury yields decline, with the 10-year yield dropping below 3.0% for the first time since early 2024. This decrease makes holding gold, a non-yielding asset, more appealing. Buying call options on gold futures or gold-backed ETFs seems like a smart move to gain exposure to this trend. However, the cryptocurrency market is showing signs of weakness that we cannot overlook. With Bitcoin falling below the critical $115,000 mark, we should think about buying put options to hedge our portfolios or speculate on a decline to the $112,000 support level. Recent on-chain data revealing a spike in crypto exchange inflows indicates that some investors may be getting ready to sell, adding to the bearish momentum.

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