MBA mortgage applications in the United States fell from a change of -8.5% to -8.9% as of January 30. Meanwhile, the US ISM Services PMI held steady at 53.8 for January, showing stable growth in the service sector. EUR/USD trades above 1.1800 after recent US data, with investors examining inflation in the euro area alongside lower-than-expected US numbers. GBP/USD dropped below 1.3700 due to a stronger USD and upcoming Bank of England announcements.

Gold and Cryptocurrency Value Movements

Gold’s price dipped below $5,000 as the USD gained strength. In the cryptocurrency market, Bitcoin climbed above $76,000 after earlier declines, while Ethereum neared $2,300 amid lower retail interest. Ripple remains around $1.60, even with mixed signals and renewed ETF inflows, bouncing back from a quick drop to $1.53. The AI and software stock market is being priced cautiously, despite worries about their recent underperformance. We’re seeing signs of weakness in the housing market reminiscent of early 2025. Last year, mortgage applications plummeted to -8.9%, and the latest data for the week ending January 29, 2026, shows a further drop to -9.5% as borrowing costs stay high. This ongoing weakness suggests the potential for buying puts on homebuilder ETFs to protect against or profit from more declines.

US Dollar Strength and Economic Indicators

The wider economy also reveals signs of cooling compared to the steady growth from last year. In January 2025, the ISM Services PMI stood at a solid 53.8, but the recent figure for January 2026 has slowed to 51.2. Although still indicating growth, this slowdown might lower expectations for future Federal Reserve interest rate hikes, making options on interest rate futures appealing as monetary policy shifts. The US Dollar’s strength is a key theme now, a notable shift from last year when EUR/USD was above 1.1800. The US Dollar Index (DXY) has risen from about 103 in early 2025 to over 107 today, putting pressure on foreign currencies. Given this trend, we should explore strategies like buying call options on dollar-tracking funds or put options on currency ETFs like FXE to benefit from ongoing dollar strength. Looking back, gold fell from highs above $5,000 in early 2025, driven by fears of high inflation. Today, gold has stabilized between $4,800 and $5,100 for the last six months, indicating that the market still accounts for persistent risk. This stable behavior is suitable for selling premium with strategies like iron condors on gold futures or ETFs. The careful pricing of AI stocks we identified in 2025 has resulted in a clear divide between winners and losers in the market. While the Nasdaq 100 is flat year-to-date, its overall performance hides significant differences within the tech sector. We should use options for pairing trades, purchasing calls on successful AI leaders while buying puts on speculative software names that have not met expectations. Create your live VT Markets account and start trading now.

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