The S&P Global Services PMI for October in the United States came in at 54.8, which is lower than the expected 55.2. This figure reflects a mixed mood in the market due to varying economic activities. In positive news, the Dow Jones Industrial Average gained 300 points, indicating a recovery. WTI crude oil dropped below $60 due to an unexpected rise in inventory, while gold prices rose by over 1%.

Currency and Commodity Overview

The EUR/USD is stabilizing around 1.1480, as the US dollar remains strong. The GBP/USD is hovering near 1.3050, with expectations that the Bank of England will not change its policy rate. Gold has bounced back from a three-day decline, helped by rising US Treasury yields. It is now aiming for $4,000 per troy ounce, while the dollar lacks a clear direction. Stellar (XLM) may decline by 15% as demand weakens. A Death Cross pattern on its daily chart raises alarms about further losses. Be cautious when trading, as speculative investments come with significant risks, including the potential total loss of your investment.

Economic Indicators and Strategies

The October Services PMI, at 54.8, signals a slight slowdown in the U.S. economy. While still growing, this marks two months of slower expansion. We’ve noted this trend, especially since the last CPI reading in September 2025 still showed inflation stubbornly high at 3.4%. Despite this slowdown, the dollar stays strong around 100.30, aided by the Fed funds rate at 5.50%. The market sees about a 70% chance of no more rate hikes this cycle, but ongoing discussions about the end of Quantitative Tightening create some uncertainty. Holding long-dollar positions carries risks without clearer signs of strong economic performance. This could be an ideal time to buy volatility as mixed data points keep the market uncertain. The VIX has risen from its summer 2025 lows and is now just above 19. Derivative traders might explore long straddles or strangles on major indices like the S&P 500 to benefit from possible volatility before the year’s end. The stark contrast between gold and oil highlights economic worries. Gold is testing the $4,000 level as a hedge against policy mistakes, while WTI crude’s drop below $60 reflects the growth concerns raised by the latest PMI report. We recommend using options to take advantage of the widening gap between these commodities, such as bull call spreads on gold and bear put spreads on oil. In currency news, the divergence between the Fed and Bank of England policies is becoming clearer. The BoE is expected to maintain its rate at 4.00% next week amid weak UK growth figures from Q3 2025. This indicates a likely downward trend for GBP/USD. Selling into rallies or buying puts may be smart strategies in the coming weeks. Create your live VT Markets account and start trading now.

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