The four-week average of initial jobless claims in the United States has dropped to 214,750 as of November 28, down from 223,750. This shows fewer people are applying for unemployment benefits. The EUR/USD currency pair remains strong above 1.1650 thanks to good data from the US and expectations of a dovish Federal Reserve. Similarly, the GBP/USD stays above 1.3350 despite a brief recovery for the US Dollar.

Gold Price Holds Near Resistance

Gold is trading around $4,200 but is consolidating due to mixed market feelings and ongoing weakness of the USD. In the cryptocurrency world, Bitcoin, Ethereum, and Ripple have paused their recovery, reflecting recent changes in market attitudes. The Federal Reserve’s plans have become unclear. They started with a rate cut, then hinted at a pause, and now might cut rates again in December. This change has led to uncertainty about what the Fed will do next. Ripple faces challenges, struggling to break through the resistance at $2.22. This might lead to a drop back to Monday’s low of $1.98 if market sentiment does not improve. The drop in the average jobless claims to 214,750 signals a tight labor market, similar to levels seen in early 2023. This strength contrasts sharply with market expectations. Despite this, the CME FedWatch Tool shows an 85% chance of a 25-basis-point rate cut at the Fed’s upcoming meeting.

Opportunity For Volatility Trading

This gap presents a chance to trade on volatility. With the VIX lingering around a low of 14, options on major indices seem underpriced given the possibility of a policy surprise. If the Fed does not go ahead with the expected cut, it could lead to a sharp market drop, making long-dated, out-of-the-money SPX puts an attractive hedge or speculative play. In currency markets, the weakness of the US dollar reflects the high likelihood of a rate cut. We should think about using currency options to manage risk around the Fed’s announcement. Buying call options on the EUR/USD or GBP/USD could be a smart move if the dollar continues to fall and the Fed confirms its dovish approach. The record gold price of $4,200 is closely linked to these rate cut expectations. This price point could see a sudden reversal if central bankers decide to hold steady, citing strong labor markets. Traders might consider options collars, which involve buying a protective put while selling a call option to protect against a hawkish surprise. The strong belief in a rate cut likely comes from recent inflation data, which seems to weigh more heavily on the Fed than employment figures. The Core PCE reading for October 2025 was 2.4%, indicating a cooling trend that gives officials the justification to ease policy. This suggests that the most likely move for the Fed is to cut rates, supporting current market positioning. Create your live VT Markets account and start trading now.

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