EUR/USD is under slight bearish pressure, staying below 1.1600. Traders are looking forward to the US House vote on a funding bill that could end the government shutdown, as well as any signals from Federal Reserve officials. GBP/USD is recovering, trading around 1.3130 during the US session. The US Dollar is weakening as the funding bill to end the shutdown progresses. There are expectations that this will be the largest government shutdown in US history.

Gold Continues to Rise

Gold is on the rise, reaching about $4,195 early Thursday. Its increase comes as the US government shutdown approaches a solution, paving the way for future actions from the Federal Reserve. Bitwise notes a positive trend in cryptocurrency, indicating a return to ICO-like fundraising methods by 2026. This could lead to a new era of financial innovation in the crypto space. Optimism about the US government’s situation is boosting risk appetite in European markets. However, the FTSE 100 is slightly down, diverging from the overall positive trend. Sui (SUI) is increasing, crossing the $2.00 mark after some recent fluctuations. This rise follows a 3.5% increase, recovering from a dip to $1.98 as the crypto market gains momentum.

Market Focus and Its Effects

The main focus for the market is the anticipated end of the US government shutdown, which is increasing risk appetite. This optimism is weakening the US Dollar as traders move away from safe investments. If the House vote is delayed or doesn’t pass, the overall sentiment could shift quickly. Once the shutdown is resolved, attention will turn to the Federal Reserve for updates on interest rates. Markets are starting to factor in rate cuts for early 2026, with futures data suggesting over a 70% chance of a cut by March. This is driving certain asset classes right now. Gold’s rise toward $4,200 is due to hopes for rate cuts, a trend reminiscent of the monetary easing in early 2020s. We believe that using call options on gold futures is a smart way to take advantage of this momentum. However, due to the current high prices, acquiring protective puts is a wise move against any unexpected hawkish comments from the Fed. The EUR/USD remains cautious below the significant 1.1600 level, showing hesitation ahead of the Fed’s announcements. We expect this pair to stay under pressure until the Fed provides clear dovish signals. Traders might consider put options to protect against a potential dollar rebound. On the other hand, GBP/USD has risen above 1.3100, mainly benefiting from the dollar’s decline. Caution is advised, as the underperformance of the FTSE 100 suggests weaknesses in the UK economy. This means the pound’s rise could be at risk if the dollar strengthens again. In the cryptocurrency space, assets like SUI are climbing due to the overall positive sentiment, recovering to the $2.00 level. The long-term narrative surrounding a new fundraising cycle in 2026 supports a bullish outlook for the sector. For now, short-term call options on major crypto assets may be a good strategy to capitalize on the enthusiasm from the expected government deal. Create your live VT Markets account and start trading now.

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