The NAHB Housing Market Index for January reported a value of 37, which is lower than the expected 40. This suggests that the housing market outlook is weaker than thought. Other financial markets are also moving. The price of gold fell below $4,600 per troy ounce due to a stronger US dollar. In the cryptocurrency market, Bitcoin stays above $95,000 despite lower retail demand, while Ethereum and XRP hold their support levels amid market changes.

Upcoming Financial Events and Influences

Some future events may impact financial markets, including the US PCE report and discussions at Davos. The Bank of Japan’s next meeting could also influence the market, along with updates on UK CPI and retail sales data. Dash cryptocurrency showed strength, hitting an intraday high of $96.85, rising in retail interest and with futures Open Interest at $165 million. The NAHB Housing Market Index hit 37, missing forecasts and staying significantly below 50, which signals growth. This decline points to weak homebuilder confidence, likely affected by mortgage rates that have stayed above 6.5% for most of 2025. This could challenge the narrative of a “resilient US economy” that has been supporting the dollar. Markets are now adjusting the likelihood of a rate cut in March. The CME FedWatch probabilities have dropped from over 70% last month to below 40% now. Traders should look for chances in interest rate futures, especially as contracts for the first half of 2026 are declining. Strong US data, particularly the upcoming PCE inflation report, may extend these rate cut expectations even further.

Currency and Commodity Market Trends

The strength of the dollar is impacting the market, pushing EUR/USD toward 1.1600 and keeping GBP/USD below 1.3400. It may be wise to buy put options on pairs like AUD/USD, as strong US data contrasts with slowing global growth. We are also seeing rising implied volatility in forex options, indicating that the market is preparing for larger currency movements in the coming weeks. Gold prices are struggling below $4,600 due to a strong dollar and the possibility of higher rates, making it less appealing. Traders are closing long positions, similar to what happened in late 2024 when hopes for a rate cut faded. For oil, WTI remains in a range, so selling covered calls or setting up iron condors could help profit from this sideways movement as geopolitical risks are offset by increasing US inventories. Create your live VT Markets account and start trading now.

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