The PBOC set the USD/CNY reference rate at 7.0865, which is lower than the previous rate of 7.0901. At the same time, the NZD/USD increased slightly to over 0.5650, showing strength despite a disappointing jobs report from New Zealand.

Temporary Support

The GBP/USD pair found some temporary support just above 1.3000, ahead of an expected Bank of England rate decision. Recent movements reflect technical factors and market pressures. Gold is still struggling and has not crossed above the $4,000 mark, despite optimism around US-China trade and a strict stance from the Federal Reserve. Ethereum is beginning to stabilize after recent losses, thanks to positive recovery signs. In other news, Stellar (XLM) could face more downward pressure due to a Death Cross pattern that has appeared. This follows a breakout pattern and a decline in retail demand impacting the cryptocurrency’s market direction. South Korea’s economy shows strong growth, with a current account surplus of $13.47 billion in September. Preliminary trade data for October indicates another strong surplus of $7.8 billion, driven by semiconductor exports. Traders might consider buying call options on the KRW/USD pair to benefit from expected appreciation of the won in the upcoming weeks.

Dollar Strength

The US Dollar is performing well, similar to the aggressive tightening by the Federal Reserve we saw in 2022 and 2023. Tomorrow, we will get the official Non-Farm Payrolls report for October, which is expected to show 210,000 new jobs. This could push the dollar higher. A short-term straddle on the EUR/USD, which is currently below 1.1500, might be a smart strategy to capture potential volatility surrounding this announcement. Gold still has a hard time getting above $4,000 as risk appetite and a hawkish Fed outlook weigh on safe assets. This is supported by data indicating that global gold-backed ETFs saw outflows of 15 tonnes in early November. Selling out-of-the-money call options on gold futures could be a good strategy to earn a premium while the metal stays capped. The Pound has weak support, with its bounce above 1.3000 appearing fragile as we anticipated. The Bank of England’s decision earlier today to maintain rates at 5.5% while adopting a softer tone on future growth confirms this weakness. Over the next few weeks, we see potential in buying put options on the GBP/USD to target a move below that critical 1.3000 level. Create your live VT Markets account and start trading now.

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