The USDCHF currency pair saw ups and downs this week. It dropped at first but found some buyers close to the 200-hour moving average. Later, the price went up in response to tariffs set by the Trump administration on Switzerland. The price has been unpredictable, hitting a low around 0.80405 and finding support at the 50% retracement level from the July 23 low to the August 1 high. On the other hand, sellers have created resistance around 0.80893 since Wednesday.

Technical Analysis and Market Directions

Technical analysis shows that these price levels are key for understanding market movements right now. The fluctuations reflect reactions to ongoing geopolitical events. Currently, the USDCHF is struggling to find a clear direction. The price is stuck between strong support at 0.8040 and solid resistance at 0.8089. This narrow range indicates that traders are uncertain after the recent tariff news. The dollar is supported by strong economic data, which explains why traders are buying when the price dips. For example, last week’s Non-Farm Payrolls report for July 2025 showed that 215,000 jobs were added, meeting expectations. Additionally, the Consumer Price Index (CPI) came in slightly higher at 3.4%, giving the Federal Reserve little reason to adjust its policies. On the Swiss side, the Swiss National Bank (SNB) is reluctant to let the franc gain too much strength, particularly with rising trade tensions. Inflation in Switzerland remains low at just 1.2% year-over-year, as reported in the latest data. This historical reluctance by the SNB to allow the franc to strengthen creates a safety net for the USDCHF pair.

Trading Opportunities and Risks

For derivative traders, this clear price range presents opportunities to capitalize on volatility. Strategies like an iron condor, with short strikes placed outside the 0.8040 to 0.8090 range, might be beneficial for those looking to profit from this price stability. This strategy takes advantage of time decay while waiting for the next market move. However, the tariff situation poses a significant risk that could disrupt this calm. We saw in 2018-2019 how quickly tariff announcements could create unexpected market shifts. This uncertainty is reflected in the increase of implied volatility on one-month USDCHF options, which has risen to 7.5%, up from an average of 6.8% in July 2025. Consequently, while selling options can be enticing, any position should have clearly defined risk limits to guard against sudden market shifts. The current pricing suggests more volatility is expected than what we’re experiencing now, indicating that this period of stability may not last. Traders should keep a close eye on potential risks, as any political news could greatly impact the technical situation. Create your live VT Markets account and start trading now.

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The EUR/USD currency pair dropped to 1.1640 after reaching a week-long high above 1.1700. This decline was driven by a rebound in the US Dollar. Additionally, the potential selection of Christopher Waller as the Federal Reserve Chairman is affecting market sentiments. Christopher Waller is a Federal Reserve Governor who was appointed by Donald Trump. He is a strong contender to take over from Jerome Powell. Meanwhile, Stephen Miran is a favorite for a board position, which could impact future monetary policy choices.

US Economic Data

Recent US economic figures showed that Jobless Claims rose to 226,000, exceeding expectations. Nonfarm Productivity increased by 2.4%, and Unit Labour Costs also dipped slightly over what was expected, suggesting caution is needed for monetary policy changes. Technical analysis indicates that the EUR/USD pair faced resistance at 1.1700, causing it to lose some gains while still aiming for a 0.5% increase this week. Bulls face challenges in the 1.1700-1.1710 range, while we expect support around 1.1595-1.1610. The Euro is the official currency for 19 countries in the Eurozone and plays a significant role in global trade. Its value changes based on many factors, including ECB interest rates, inflation data, and other economic indicators. Now, the EUR/USD has retreated to about 1.1640, largely due to the stronger US Dollar. This shift follows the latest US Consumer Price Index (CPI) data from July 2025, which showed an inflation rate of 3.4%. This serves as a reminder that inflation remains a major concern for the Fed. The pair’s struggle to maintain gains above 1.1700 suggests strong resistance is forming.

Potential Impact of US Monetary Policy

The discussion about Christopher Waller potentially leading the Federal Reserve is creating a cautious outlook for US monetary policy. His previous statements indicate he prefers stricter inflation control, which typically supports a stronger dollar. The market remembers the volatility during the 2018 leadership change, meaning this uncertainty might lead to hedging against euro strength. On the other hand, the European Central Bank seems more reluctant to tighten its policies. Recent German ZEW economic sentiment data from July 2025 showed a decline, indicating ongoing worries about industrial output in the Eurozone. This divergence in policy is a key reason we foresee further pressure on the EUR/USD exchange rate. For derivative traders, this suggests preparing for a possible decrease in the EUR/USD. Buying put options below the 1.1600 support level could be a strategy to benefit from a downward trend in the upcoming weeks. These options provide defined risk in case the pair unexpectedly rallies. We witnessed a similar pattern in 2022 when aggressive Fed tightening drove the EUR/USD below parity for a moment. While the recent rise in Jobless Claims to 226,000 raises some caution, the main narrative continues to emphasize Fed hawkishness. Thus, we should be ready for the dollar to maintain its upward momentum against the euro until the end of the month. Create your live VT Markets account and start trading now.

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Scandinavian currencies could do well if geopolitical risks lessen. Sweden’s krona may perform better than Norway’s krone, mainly due to the different impacts of energy prices on the two countries. Recently, the NOK/SEK exchange rate dropped, likely linked to this difference. In July, Sweden’s CPIF inflation was expected to rise to 3.0%, but core inflation fell more quickly than anticipated to 3.1%. The Riksbank is not likely to cut rates further, even after the recent EU-US trade deal. The market has already considered this, which supports a positive outlook for the Swedish krona in the medium term. The EUR/USD is stable around 1.1650 due to tariff worries and the release of US inflation data. The GBP/USD trades cautiously near 1.3450 as traders aim to lock in profits with a recovering US dollar. Gold is struggling to stay above $3,400 because of a small uptick in the US dollar. Canada’s unemployment rate could change with the upcoming Labour Force Survey report. The Bank of England lowered its rates by 25 basis points to 4% and hinted that rate cuts may end soon due to inflation worries. We believe the Swedish krona is a better investment than the Norwegian krone in the coming weeks. Geopolitical risks have eased a bit, leading Brent crude oil prices to drop from over $95 last month to around $88. This decline hurts Norway’s oil-based economy. Historically, when energy prices have dropped like this in the late 2010s, the krona has typically performed better, and we expect this trend to continue. We think the Riksbank will pause interest rate cuts for now, even with the recent EU-US trade agreement. Sweden’s July inflation report showed CPIF at 3.0%, and a solid manufacturing PMI of 52.4 suggests the economy doesn’t need more stimulus. This supports our view that the krona has a stable foundation for the upcoming quarter. Traders should be cautious when trading the euro against the dollar, as it struggles to stay above 1.1600. This week, July’s US inflation data came in higher than expected at 3.4%, boosting the dollar. With ongoing concerns about potential US tariffs on European auto exports, traders might consider options strategies that would profit if EUR/USD drops to around 1.1500. For the British pound, this is a good time to take profits on long positions against the US dollar. After the Bank of England cut its rate to 4.0% earlier this month, recent data showed that UK wage growth remains stubbornly high at 5.5%. This reality likely caps the pound’s recent rise near the 1.3450 level. Gold is unlikely to break the $3,400 per ounce barrier soon. The stronger US dollar and rising US 10-year Treasury yields, now at 4.35%, make holding gold less appealing. We recommend avoiding new long positions until this resistance is clearly surpassed. Traders should pay close attention to the Canadian dollar today as the July Labour Force Survey is set to be released. The market expects the unemployment rate to rise slightly to 6.3% from 6.2%. Any result below this forecast could lead to a significant rally for the Canadian currency.

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The Canadian jobs report showed a loss of 40,800 jobs in July, much worse than the expected gain of 13,500. This follows the previous gain of 83,100 jobs, highlighting a significant downturn when gains were expected. The unemployment rate remained steady at 6.9%, which is slightly better than the forecasted 7.0%. However, this stability occurs in a generally weak job market.

Full-Time Employment Drop

Full-time jobs dropped by 51,000, compared to an increase of 13,500 before. Part-time jobs increased by 10,300, but this was not enough to offset the full-time losses. The participation rate fell to 65.2% from 65.4%, indicating fewer people are engaging in the labor market. This situation casts a shadow on Canada’s job landscape despite the unchanged unemployment rate. The USDCAD exchange rate moved slightly higher and is now hitting a resistance level. Traders consider key support and resistance levels to guide market trends and strategies. Today is August 8, 2025. The sudden loss of 40,800 jobs in Canada is a major warning sign for the market. This significant drop contrasts sharply with the expected gain of 13,500, suggesting the Canadian economy is slowing down more quickly than anticipated.

Bank of Canada Under Pressure

This job decline, particularly the loss of 51,000 full-time positions, puts pressure on the Bank of Canada. We believe this report greatly reduces the chances of further interest rate hikes this year. Now, all eyes are on the possibility of a rate cut before the year ends. Canada’s latest inflation report for July 2025 still shows CPI at 2.8%, above the central bank’s goal. However, this disappointing jobs report is likely to overshadow inflation concerns for policymakers. The declining participation rate further reveals an underlying weakness that must be addressed. This stands in stark contrast to the United States, where recent non-farm payrolls show ongoing job growth and stable wages. The fundamental difference supports a stronger US dollar compared to the Canadian dollar. Additionally, WTI crude oil prices have struggled to stay above $75 a barrel, adding more pressure on the loonie. Back in late 2023, the Bank of Canada responded to similar labor market issues by adopting a cautious stance, leading to rate cuts in 2024. This suggests the central bank will take this report very seriously, making the upcoming policy meeting in September crucial. For derivative traders, this outlook favors strategies that profit from a rising USDCAD. Buying call options on USDCAD can allow speculation on further increases while managing risk. The rising uncertainty may lead to increased implied volatility, making options pricing more fluid. The currency pair is currently testing a resistance level, so a sudden breakout is not guaranteed. Traders might look into bull call spreads to lower their entry costs, targeting the 1.3900 level reached earlier this year. It’s important to closely monitor upcoming retail sales and inflation data for confirmation of this economic slowdown. Create your live VT Markets account and start trading now.

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ICE Brent dropped almost 0.7% as talk of a possible meeting between Presidents Trump and Putin surfaced. It’s unclear if Ukrainian President Volodyr Zelenskyy will be involved, especially since today is the deadline for the Russia-Ukraine peace deal, which might prompt the US to tighten sanctions on Moscow. Indian state refiners are hesitant to buy Russian crude oil due to tariff uncertainties. They are looking for government guidance and worry about how secondary tariffs could affect India. As a result, India may turn to other sources for crude oil, particularly from the Middle East, due to the gap between US exports and savings from Russian crude. China’s crude oil imports in July averaged 11.2 million barrels a day, an 11.5% increase from last year, but more than 8% lower than the previous month. The strong imports in June were linked to independent refiners restocking. For the first seven months of the year, the average is 11.3 million barrels a day, a 3.2% year-on-year increase. Given the current situation, we expect increased volatility for ICE Brent. The possible Trump-Putin meeting could lead to less tension, which might lower prices. Meanwhile, the peace deal deadline and potential new sanctions pose significant risks for price increases. The CBOE Crude Oil Volatility Index (OVX) has already risen to 38, signaling market stress, so we should be ready for sharp price changes. The risk of stronger US sanctions on Moscow is important, especially if today’s peace deal deadline passes without an agreement. Looking back at 2022, sanctions on Russia caused Brent crude prices to exceed $120 a barrel. This history suggests that buying some out-of-the-money call options could be a smart way to hedge against a sudden price jump if talks do not succeed. We are keeping a close watch on India’s refiners, as their next move could significantly impact the physical market. As the third-largest oil importer, if India decides to shift away from purchasing over 1.5 million barrels per day of Russian crude, this could drive up demand for Middle Eastern oil. Such a shift would strengthen the Brent benchmark, making long positions in Brent futures appealing for the coming months. The data from China paints a more cautious outlook for crude demand. While year-on-year import numbers are strong, the month-on-month decline lines up with the official manufacturing PMI from China’s National Bureau of Statistics, which has remained just above the 50-point mark, indicating only slight expansion. This suggests that while Chinese demand supports prices, it may not be robust enough to spark a major rally. Considering these mixed geopolitical and demand signals, we think a neutral options strategy, like a long straddle, is the best approach for the upcoming weeks. This allows us to benefit from significant price movements in either direction, whether from a diplomatic breakthrough or increased sanctions. It positions us to profit from uncertainty, rather than speculating on one specific outcome.

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The US Dollar is bouncing back after some recent losses, thanks to reports that Fed Governor Waller might replace Chair Powell. Appointed by Trump, Waller is viewed positively because of his dovish approach and support for the central bank’s credibility. US jobless claims have risen to 226,000, higher than the expected 221,000, compared to the previous 218,000. In the meantime, the St. Louis Fed President warned about how tariffs could affect inflation, suggesting that only one rate cut may happen this year, even though the market expects two cuts. In Japan, the Bank of Japan’s meeting summary expressed concerns about how US tariffs could impact the Japanese economy, possibly affecting future rate decisions. The BoJ has maintained a very loose monetary policy since 2013 to boost growth, which included Quantitative and Qualitative Easing (QQE) and setting negative interest rates. This approach has contributed to the Yen’s decline while other central banks have raised rates. As a result, the Yen has weakened, worsened by rising global energy prices, leading to higher inflation in Japan that exceeds the BoJ’s 2% target. Rising salaries in Japan are also contributing to this inflation, partly due to the BoJ’s earlier policies. Currently, the US Dollar is gaining strength because the market is now expecting fewer rate cuts from the Federal Reserve this year. Although weekly jobless claims have increased to 226,000, the key July 2025 inflation data came in a bit hotter at 3.4%. This supports the idea that the Fed will be careful, which helps the dollar for now. While the rise in jobless claims hints at some weakness in the labor market, it’s important to look at the overall situation. Last Friday’s major Non-Farm Payrolls report showed that the US economy added a solid 195,000 jobs. This indicates a cooling labor market rather than a collapse, giving the Fed less of a reason to rush into rate cuts. In Japan, we are closely watching for a major policy shift from the Bank of Japan, which has been showing more concern about the weak Yen and the effects of tariffs. Japan’s core inflation has remained above the BoJ’s 2% target for over a year, recently reaching 2.5%. This follows their historic decision in March 2024 to end the era of negative interest rates. For derivative traders, this creates a tense situation for the USD/JPY pair, which is currently trading around 162. The long-established strategy of buying dollar calls against the yen is becoming riskier as the reasons for policy divergence are shrinking. We believe options strategies that predict a cap on the upside or a gradual decline are becoming increasingly appealing. With mixed economic signals, we should expect more currency volatility in the coming weeks. Traders might consider buying straddles or strangles on major pairs like USD/JPY to profit from significant moves, regardless of direction. This allows them to take a position on rising uncertainty rather than betting on one specific outcome.

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The USD is strengthening against the JPY, while it has mostly stayed the same compared to the EUR and GBP. Traders are focusing on the risks and opportunities in these major currency pairs. They want to identify potential targets and understand what traders are paying attention to and why.

USD vs. JPY Analysis

The dollar is gaining against the yen due to contrasting policies from the Federal Reserve and the Bank of Japan. The US added 210,000 jobs in the July 2025 report, boosting expectations that the Fed will keep rates at 4.75% this fall. In Japan, inflation remains low at just 1.8%, leading the Bank of Japan to maintain its stance. This signals derivative traders to favor a long position on the US dollar against the yen. They can do this by buying USD/JPY call options, targeting the 158.00 level in the next few weeks. The main risk comes from a sudden change in Japanese officials’ tone. However, for now, the trend is upward. Currently, there’s a market dynamic similar to the strong trends of 2022 and 2023 when interest rate differences took the pair to historic heights. During that time, comments from the Ministry of Finance only caused temporary dips, providing better opportunities for long positions. Traders should stay alert for similar comments that could create chances to increase their bullish positions.

EUR and GBP Analysis

For the euro and the pound, the lack of movement indicates a pause as traders look for clearer signals. The latest flash PMI data from the Eurozone shows mixed results: a drop in manufacturing but stability in services, creating uncertainty for the European Central Bank. Meanwhile, the Bank of England also kept rates steady, noting inflation is persistent but slowing. This has limited the pound’s potential. In this sideways movement for EUR/USD and GBP/USD, derivative traders will likely turn to strategies that profit from low volatility. One common approach is selling out-of-the-money strangles, which means selling both a call and a put option to collect premium while the pairs stay within a range. The main risk here is an unexpected data release that could trigger a breakout from these established ranges. In summary, market direction is largely driven by differences in central bank policies and economic momentum. The dollar has a clear path against the yen, while the euro and pound are caught in a struggle. Traders should prepare for these trends to continue in the near future. Create your live VT Markets account and start trading now.

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The Canadian jobs report for July 2025 shows a loss of 40,800 jobs, much worse than the expected gain of 13,500 jobs. Previously, there was a growth of 83,100 jobs. The unemployment rate is at 6.9%, just below the expected 7.0%. Full-time jobs decreased by 51,000 after an earlier increase of 13,500 jobs. In contrast, part-time jobs increased by 10,300, which is down from the previous growth of 69,500 jobs. The participation rate fell to 65.2% from 65.4%. Average hourly wages grew by 3.3%, slightly up from 3.2%.

Weak Employment Growth For The Year

This report indicates weak job growth for the year, with little change in employment numbers since January. Following the release of this report, the Canadian dollar weakened as traders adjusted the chances of a rate cut in September from 33% to 38%. The Bank of Canada may need stronger reasons to justify a rate cut in September due to ongoing higher inflation. The July 2025 jobs report disappointed, showing a significant loss of jobs when a gain was expected. This weak performance, especially the decline in full-time jobs, has led traders to increase the likelihood of a rate cut in September to 38%. Consequently, the Canadian dollar has weakened against the US dollar.

Potential September Rate Cut

Looking back, in late 2023 and early 2024, economic growth slowed while inflation remained above the Bank of Canada’s 2% target. During that time, the Bank kept rates steady until there was clear evidence that inflation was under control. This suggests that the Bank of Canada will be cautious and may not cut rates based on just one weak jobs report, especially as wages continue to rise at 3.3%. In the coming weeks, a smart move is to use options on Bankers’ Acceptance futures (BAX) to prepare for a possible September rate cut. Traders are buying contracts that will benefit if the Bank decides to cut rates, though these contracts are still relatively inexpensive because the odds are under 50%. This strategy limits risk if the Bank keeps rates steady due to ongoing wage inflation. Given the weak job data, we expect the Canadian dollar to remain pressured against the US dollar. Historically, when the Bank of Canada was set to make significant policy changes, the USDCAD exchange rate often shifted markedly before the official announcement. Thus, using options to short the loonie, such as buying puts on the Canadian dollar, is a common approach to protect against or profit from further weakness. The biggest uncertainty remains inflation, with the upcoming Consumer Price Index (CPI) report being crucial before the September meeting. Canada’s core inflation has recently been around 2.8%, still above the Bank’s target. If that number comes in higher than expected, it could eliminate current rate cut expectations and lead to a strong reversal in the Canadian dollar. Create your live VT Markets account and start trading now.

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Canada’s unemployment rate for July is 6.9%, staying the same as last month and better than the expected 7%. However, there was a loss of jobs, with a net change of -40,800, instead of the predicted gain of 13,500 positions. The employment rate dropped by 0.2 percentage points to 60.7%. This decline mainly affected young people aged 15 to 24, who lost 34,000 jobs. Employment for core-aged individuals (25 to 54 years) and those 55 and older did not change much. The participation rate also slightly decreased to 65.2%.

Average Hourly Wages Rise

Average hourly wages increased by 3.5% compared to last year, up from 3.2% in June. This employment news impacted the Canadian dollar, putting some downward pressure on it. At the time, the USD/CAD was trading at 1.3760. The Bank of Canada kept interest rates at 2.75% and noted that the Canadian economy remains strong despite global uncertainties. Even though employment rose unexpectedly in June, recent GDP figures showed an economic decline in May, with slight growth expected in Q2. Market forecasts suggest job creation in July will continue but at a slower pace, while the unemployment rate may return to 7%. The July jobs report gives a mixed view of the Canadian economy. While the unemployment rate stayed at 6.9%, the loss of 40,800 jobs indicates some weaknesses. This contradiction could lead to more market volatility in the weeks ahead. The increase in wage growth to 3.5% is significant, especially since Statistics Canada reported a rise in core inflation to 3.1% for July. This puts the Bank of Canada in a tough spot, making an interest rate cut unlikely despite the poor job figures. We expect the central bank to keep rates steady at 2.75% in its September meeting.

Currency Traders Eye Canadian Dollar

For currency traders, the Canadian dollar seems likely to weaken. The disappointing employment data should support the USD/CAD pair, which is already near 1.3760. Using options might be a good strategy to express a bearish view on the loonie, especially as it struggles to break the 1.3800 resistance level from last quarter. The notable drop in youth employment raises concerns for consumer-related sectors in the economy. This may lead to weakness in Canadian retail and discretionary stocks on the Toronto Stock Exchange. We are considering more defensive options, such as put options on consumer-focused ETFs. This situation feels reminiscent of the economic challenges faced in late 2023, as we balanced slow growth with persistent inflation. Additionally, recent weak manufacturing data from the Eurozone and China is raising global growth worries. These factors suggest we should remain cautious in the upcoming weeks. Create your live VT Markets account and start trading now.

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The euro rose slightly after news of a potential meeting between Trump and Putin. However, we need to realistically assess the chances for a truce. Analysts expect markets to react carefully, focusing on energy prices and euro currency pairs. Currently, the EUR/USD rate is likely to stay between 1.166 and 1.170. The upcoming US Consumer Price Index (CPI) report could impact whether we see further movement.

Investment Risks and Recommendations

Investors should remember the risks and uncertainties in market forecasts. Conducting thorough research is essential before making any investment decisions, and this information should not be viewed as a specific recommendation. Economic forecasts, such as Canada’s labor report and the Bank of England’s interest rate cuts, continue to influence the market. Market sentiment responds to various factors, including inflation fears and changes in economic policy. Trading in foreign exchange and open markets comes with significant risks, including the possibility of losing your capital. Anyone participating in these activities should carefully evaluate their financial situations and consider seeking independent advice. The opinions shared here reflect individual authors’ views and do not necessarily align with broader policies or strategies. We cannot guarantee the accuracy of this information and accept no liability for errors or omissions.

Market Volatility and Forecasts

We expect the euro to initially benefit from news about a possible Trump-Putin meeting but must remain realistic about any potential truce. Traders need to monitor market responses to this informal diplomacy. Key indicators include European natural gas futures and currency pairs. A breakthrough could lead to significant market moves, while a failed meeting might result in a swift reversal. The EUR/USD pair has been stable between 1.166 and 1.170 for the past two weeks, recovering from the 1.12 level seen earlier in 2025. The upcoming US CPI report will be crucial for the next steps. July’s CPI showed persistent inflation at 3.4%, so another high reading could strengthen the dollar and break this support. We should keep in mind the volatility of recent years. For instance, the EUR/USD pair fell below parity in 2022 due to the energy crisis. This history teaches us that risk can re-emerge quickly even within a stable range. Implied volatility for one-month EUR/USD options has increased from 6% to 7.5% in the last week, indicating the market anticipates larger moves. Other economic reports are also shaping the market and creating opportunities in currency pairs. Last week, the Bank of England cut interest rates by another 25 basis points, the third cut in 2025, continuing to put pressure on the British pound. Canada’s upcoming labor report will also be significant, especially after July’s job growth numbers fell short of expectations. Trading in foreign exchange and open markets carries considerable risk, including the potential for total capital loss. We all need to assess our financial situations carefully before acting on this information. Seeking independent advice is a smart choice in this uncertain landscape. These opinions are based on our market analysis as of August 8, 2025, and do not reflect a formal strategy. Information can become outdated quickly, and we accept no liability for any inaccuracies or omissions in our forecasts. Create your live VT Markets account and start trading now.

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