In June, the United States saw personal income rise by 0.3%, exceeding predictions of 0.2%. This increase reflects the economy’s state and impacts financial decisions. The EUR/USD pair gained momentum, approaching 1.1450 after dipping to about 1.1400. Markets reacted to the Federal Reserve’s decisions and favorable employment and PCE data from the US. The GBP/USD pair fluctuated, rising above 1.3200 in a mixed trading environment. These changes came as the US Dollar faced downward pressure from new data releases. Gold prices faced selling pressure, hovering around $3,300 per troy ounce. The movements of this precious metal coincided with a decline in US yields and a softer Greenback. Bitcoin’s price remained between $116,000 and $120,000, thanks to whale activity and clearer regulations. Additionally, JPMorgan and Coinbase announced a new deal to connect bank accounts with crypto wallets. The Federal Open Market Committee (FOMC) is discussing tariff uncertainties. They are focusing on how tariffs affect labor markets and inflation. After June’s rise in personal income, July’s inflation numbers showed a modest 2.8% year-over-year increase, slightly lower than anticipated. This eases pressure on the Federal Reserve, suggesting they may not raise rates soon. For traders, this could lead to less volatility in interest rate-sensitive instruments, making selling options premium a smart strategy. The EUR/USD pair pushed toward 1.1450 last month but has lost momentum after July’s Eurozone PMI data revealed a surprising slowdown in the services sector. Similar dips in PMI data in late 2024 led to a temporary euro drop of 1-2 cents. Therefore, we see an opportunity in selling near-term EUR/USD call options with a strike price near 1.1400. For GBP/USD, the rise above 1.3200 has faded following the Bank of England’s cautious tone last week. This came after new data indicated UK retail sales fell by 0.5% in the last June reading. We are looking into derivative straddles to take advantage of the growing uncertainty, which could benefit from significant price movements in either direction. Gold’s struggle around the $3,300 mark is troubling, especially with the 10-year Treasury yield dropping to 3.5% this week. Usually, lower yields support gold prices, but open interest in gold futures has decreased by 5% in the last two weeks. This suggests a lack of buying confidence, making purchasing put options a practical way to hedge against a potential decline toward the $3,200 support level. Bitcoin is still within its narrow range, but on-chain data from July 28 noted a net outflow of 12,000 BTC from exchanges, a sign often seen before price rallies. Large outflows previously in 2023 led to significant price increases within the next quarter. We believe buying call options with a $125,000 strike, expiring in September, is a sensible strategy for a potential breakout.

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