In the United States, the Baker Hughes oil rig count hit 414, surpassing the expected count of 413. This figure helps track the country’s oil extraction activity and is closely monitored by market players. Additionally, various market sectors are shifting, with the Dow Jones experiencing uncertain consumer sentiment. The USD/JPY climbed back above 153.00 after recent market movements, while the EUR/USD gained momentum due to a weakening US Dollar amid concerns about a government shutdown.

Trends in Nasdaq and S&P 500

Both the Nasdaq 100 and S&P 500 indices have broken through their support trendlines, raising questions among traders about whether a rally might be ending. Gold prices have soared to $4,000 per troy ounce, fueled by the impending US shutdown and related economic data. Recently, there were efforts to stabilize the Dogecoin market, especially following news about a potential ETF launch. Discussions in the market have focused on risk sentiment, influenced by upcoming Federal Reserve decisions and central bank meetings in Australia and the UK. FXStreet, a reliable financial insights provider, highlights the need for careful research before making financial decisions. It notes that it does not guarantee the complete accuracy or timeliness of the information provided. Following the break in major support trendlines for the S&P 500 and Nasdaq 100, traders should prepare for further declines. The current consumer sentiment reading is at its lowest since the short recession of 2023, reinforcing a bearish outlook. We are opting to buy put options on broad market indices to take advantage of potential increased volatility.

Gold Prices and US Dollar Trends

Gold’s rise above $4,000 signals a significant flight to safety, heightened by uncertainty surrounding the current US government shutdown. Historically, during the prolonged shutdown of 2018-2019, gold prices increased by over 4% as the dollar weakened, a trend we are witnessing again. Investors can benefit from this ongoing market anxiety by purchasing call options on gold futures or related ETFs. The weakness of the US Dollar is a major concern, driven by recent Federal Reserve rate cuts and disappointing economic data. Consequently, we are seeing strength in currency pairs like EUR/USD, which is nearing the 1.1600 resistance level. We believe that buying call options on currencies paired with the dollar, such as the Euro and British Pound, is a wise strategy for the upcoming weeks. While the US oil rig count has slightly increased to 414, it remains historically low, significantly below the pre-pandemic average of over 750 rigs. This indicates that producers are hesitant to expand. Coupled with fears of a recession affecting demand, oil prices are likely to remain capped. We see an opportunity to sell out-of-the-money call spreads on WTI crude futures, betting that a price increase is improbable. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now