Recent Labour Market Trends

The US Dollar has recently risen but did not break the 200-day moving average, settling at 99.80. Analysts at OCBC note that the bullish momentum is fading, with the Relative Strength Index (RSI) also declining. Current support levels for the USD are at 99.80, 99.10, and 98.40. Resistance is found at 100.30/60. This week, a lack of decisive data and a divided Federal Reserve contributed to an early rally for the USD. However, if US data shows further weakness and the Federal Reserve cuts rates more, we could see a weaker US Dollar. Recent data points to a softening labour market, with a slowdown in private sector job creation and an increase in layoffs. One report indicated job cuts surged by 183% from September to October, totaling 153,000. So far this year, 1.1 million job cuts have been announced, the highest since the COVID-19 pandemic began in 2020. Additionally, job postings on Indeed and wage growth rates have dropped throughout the year. The expectation is for a softer US Dollar, especially if the Federal Reserve continues to cut rates, depending on overall risk sentiment and external growth conditions. At the same time, the US government is experiencing its longest shutdown, which has lasted over 36 days. The recent rise of the US Dollar seems to be ending after failing to break its 200-day moving average. With momentum fading, the Dollar Index (DXY) appears set for a moderate decline from 99.80. Keep an eye on support levels of 99.10 and then 98.40 in the upcoming weeks. This outlook is supported by this morning’s Non-Farm Payrolls report for October 2025, which showed the US economy added only 110,000 jobs, falling short of the 180,000 forecast, and confirming the trend of a weakening labor market. This follows a report from Challenger, Gray & Christmas that indicated job cuts have reached their highest level since the beginning of the COVID pandemic in 2020, reinforcing the expectation that the Federal Reserve will maintain its easing approach.

Positioning for Further Dollar Weakness

With the Federal Reserve cutting rates by 25 basis points at its last meeting and core inflation decreasing to 2.8%, further cuts are anticipated in early 2026. Reflecting on the extended government shutdown from 2018-2019, the DXY experienced fluctuating, sideways trading before it weakened — a pattern that may occur again now. This ongoing shutdown, already the longest on record, adds to the negative outlook for the dollar. For traders in derivatives, this situation suggests positioning for further dollar weakness. Consider buying put options on the UUP (the dollar index ETF) with targeted strike prices below the current level, set to expire in late December 2025 or January 2026. Since recent data surprises have increased volatility, using put debit spreads could be a cost-effective strategy to express this bearish outlook. This strategy can also apply to currency pairs, especially by buying call options on EUR/USD futures. The euro has shown strength, and as long as risk sentiment remains stable, the pair could reach the resistance level of 1.1550. The outlook for the British Pound is less clear due to the Bank of England’s weak demand forecast, suggesting a more cautious approach, like a bull call spread on GBP/USD, may be wise. The long government shutdown and weak economic signals are creating broader market uncertainty, as reflected by the VIX remaining above 20. Traders should think about using VIX call options as a hedge against any sudden risk-off events, which could emerge from political gridlock or unexpected economic downturns. This environment also supports the strength seen in safe-haven assets like gold, currently above $4,000 an ounce. Create your live VT Markets account and start trading now.

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The Pound Sterling has made a slight recovery after the Bank of England decided to keep interest rates the same. However, Governor Andrew Bailey seems likely to cut rates in December, which has a 70% chance of happening according to current market pricing. This could lead to lower short-term rates and a weaker pound. It’s expected that the EUR/GBP might get support near the 0.8760 level. As we approach the Budget announcement later this month, it’s anticipated to trade above 0.88, which could change market dynamics.

Bank Of England Holds Rates Steady

Yesterday, the Bank of England decided not to change interest rates, giving the pound a brief boost. But with Governor Bailey hinting at a possible rate cut next month, there are worries for Sterling’s value. The market is currently pricing a 70% chance of a December cut, which may be too low. Recent economic data supports this view. The latest figures from the Office for National Statistics show that headline inflation for October 2025 has dropped to 2.1%, just above the Bank’s target of 2%. Additionally, GDP growth for the third quarter was only 0.1%. These statistics give the monetary policy committee a reason to consider stimulating the economy. For those trading derivatives, buying GBP put options that expire after the December meeting may be a smart move to bet on a weaker pound. With the current pricing, these options could be valuable as the likelihood of a rate cut increases. This strategy aims to profit from the anticipated decline in Sterling as the market adjusts to new expectations. We are also keeping an eye on the EUR/GBP pair, which should find solid support around the 0.8760 level. We expect it to trade above 0.88 as we near the government Budget statement later this month. Traders can consider using call options on EUR/GBP to capitalize on this expected rise.

Repricing Of UK Interest Rates

In addition to currency movement, the adjustment of UK interest rates offers a chance for profit. Short-term UK rate futures aren’t fully accounting for the possibility of a rate cut, similar to what we noticed during the easing cycle in 2019. This creates an opportunity to position for lower rates as the market aligns with the Bank’s signals. Create your live VT Markets account and start trading now.

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Singapore’s foreign reserves decreased slightly to $392.2 billion in October from $393.1 billion. This is part of a larger financial analysis that looks at global economic trends and currency movements. The GBP/USD currency pair dropped to about 1.3100 after a cautious decision from the Bank of England in November. Meanwhile, the EUR/USD fell below 1.1550 during the European session, influenced by the recovering US Dollar amidst global economic uncertainties and a government shutdown.

Gold and Market Sentiment

Gold remained above $4,000, mainly due to strong safe-haven demand. Concerns about economic challenges from the ongoing US government shutdown have made investors cautious about riskier assets. Dogecoin bounced back, trading over $0.1600. This surge was driven by excitement around the expected launch of Bitwise’s Dogecoin Exchange Traded Fund in about 20 days, following a rough start to the week for the cryptocurrency. Looking ahead to next week, focus will shift to central bank activities and US economic data that could affect market dynamics. The different paths for currencies like the Aussie and Pound suggest varied potential outcomes as central banks get ready for future meetings. In October 2025, Singapore’s foreign reserves saw a slight decrease to $392.2 billion. This modest drop might mean that the Monetary Authority of Singapore is stepping in to support the Singapore dollar. Thus, we should be careful about making significant short positions against it.

Market Sentiment and Economic Indicators

The overall market sentiment is leaning towards risk aversion, which has weakened the US Dollar against the Euro and Yen. This follows last Friday’s US jobs report, which showed a disappointing gain of only 85,000 jobs, reinforcing the narrative of a slowing US economy. In this climate, shorting the dollar, possibly through futures or put options on the DXY index, could be a worthwhile strategy. With growing expectations for a Federal Reserve rate cut, further pressure is being placed on the dollar. The CME FedWatch Tool now shows an 85% chance of a rate cut at the December 2025 FOMC meeting. This outlook on monetary policy suggests continued weakness for the US dollar in the next few weeks. Gold remains an important asset to monitor, staying strong above the $4,000 mark due to robust safe-haven demand. Inflows into gold-backed ETFs were strong, with global holdings increasing by over 2% in October 2025. Investing in call options on gold futures could capitalize on this upward trend. The Pound Sterling looks weak after the Bank of England raised concerns about short-term demand. The latest inflation rate in the UK came in at 2.5%, providing the central bank with more room to adopt a supportive policy. This dovish stance implies that selling GBP/USD futures might be a profitable move. In the cryptocurrency world, Dogecoin is responding positively to news that a Bitwise spot ETF could launch within 20 days. This is a highly speculative event likely to increase volatility. Using options to create a long straddle could be a way to trade the expected large price movements. Create your live VT Markets account and start trading now.

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The Pound is strengthening against a weaker Yen, but it is having trouble breaking past the 201.40 resistance level. The Yen’s decline is due to lower-than-expected Japanese household spending, which supports the Pound. On Friday, the GBP/JPY pair gained traction because the Yen was weak. Household spending growth in Japan slowed to 1.8% year-on-year in September, down from 2.3% in August and lower than the expected 2.5%. Despite this, the pair is struggling to exceed the recent peak of 201.40.

Japan’s Monetary Policy and Economic Outlook

Prime Minister Takaichi remarked on Japan’s efforts to achieve stable price growth, raising doubts about possible interest rate hikes by the Bank of Japan in December. The Pound experienced fluctuations on Thursday when the Bank of England decided to keep interest rates steady, in a tightly contested vote with four members calling for a cut. The BoE’s monetary policy statement expressed optimism regarding peak inflation, with Governor Bailey hinting at potential monetary easing in the future. This raised hopes for a possible rate cut in December. The household spending data, an important measure of consumer confidence and economic growth, fell short of expectations, negatively impacting the Yen. With the GBP/JPY pair struggling at the 201.40 resistance level, this is a crucial decision point for the upcoming weeks. The key factors are the Bank of England’s newly dovish stance and the continuing weakness of the Japanese Yen. This ongoing battle at a significant technical level suggests increased volatility ahead. The Yen’s weakness is not just reflected in Friday’s household spending report. This trend has been seen throughout 2025, as core inflation in Japan remains at 2.1%. It has failed to generate the sustainable wage growth needed for the Bank of Japan to make substantial policy changes. This casts doubt on a potential rate hike in December, applying more pressure on the currency.

Strategies for Traders

Meanwhile, the Pound is facing challenges following the close outcome of the Bank of England meeting. UK inflation has dropped to 2.7%, significantly lower than the 2024 averages, making the BoE’s hints at a possible rate cut credible. This limits the Pound’s strength and explains the stagnation at the 201.40 level. For traders, the uncertainty before the December central bank meetings makes buying volatility an attractive strategy. We recommend purchasing GBP/JPY strangles with options expiring in late December for a chance to profit from a sharp market movement in either direction. This method allows traders to benefit from a decisive shift without having to predict whether the BoE’s dovishness or the BoJ’s inaction will prevail. For those who are slightly bullish about the Yen’s ongoing weakness, buying call options with a strike price just over 201.50 could be a low-risk way to bet on a price increase. The option cost represents the maximum loss, offering protection against a sudden reversal in bearish Sterling sentiment. This approach allows for potential upside while managing risk. In reviewing past data, we observed a similar situation during the 2022-2023 policy divergence, which resulted in a strong, one-sided trend in this currency pair. The current landscape differs, with both central banks leaning dovish, creating a potential for the pair to remain within a volatile range before its next major movement. Therefore, strategies that capitalize on sharp price swings rather than a prolonged trend may be more suitable for the upcoming weeks. Create your live VT Markets account and start trading now.

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Gold remains strong, staying above $4,000, even with mixed signals from the market. Concerns about a long US government shutdown and questions about tariffs are pushing investors toward gold, which is benefiting from weak stock markets. A private survey showed job losses in the US for October, hinting at possible Federal Reserve rate cuts. While there has been some buying of the US Dollar, the overall situation still favors higher gold prices. Traders are looking at gold potentially rising to between $4,020 and $4,030.

Impact of the Government Shutdown

The US government shutdown has now lasted 38 days, increasing economic uncertainties. The Congressional Budget Office estimates a GDP drop of up to 2%. There are also concerns about the legality of tariffs imposed during the emergency, adding to the uncertainty. The chance of the Fed cutting rates in December is now at 67%, up from 60%. Despite some US Dollar buying, gold has gained as the Dollar weakens. Gold’s performance relies on factors like political stability, interest rates, and the strength of the USD. Central banks play a big role in gold demand, with notable purchases from China, India, and Turkey. Gold tends to rise when the USD weakens or during times of economic stress. With gold currently holding above $4,000, we should continue to focus on safe-haven demand. The ongoing government shutdown has surpassed the 35-day shutdown we experienced in 2018-2019, creating significant economic uncertainty. This ongoing deadlock, along with Supreme Court questions about presidential tariff powers, keeps investors anxious and stock prices low. We see clear signs of a slowing US economy, paving the way for more bets on another Federal Reserve rate cut in December. Private payroll data showed job losses in October, contrasting sharply with stable monthly job gains earlier in 2024. This weak labor market reinforces the 67% likelihood of a rate cut next month, making gold, a non-yielding asset, more appealing.

Derivative Trading Strategies

For those trading derivatives, this environment suggests bullish strategies, but with caution. A solid move above the $4,020-$4,030 resistance level could signal opportunities to buy call options or enter long futures contracts, aiming for $4,100. Economic concerns strongly support this strategy in the weeks ahead. However, we must also be prepared for a reversal if political sentiments change. A sudden end to the government shutdown could lead to a quick sell-off, so it’s wise to monitor the $3,965 support level. Buying put options with strike prices below this level, maybe around $3,900, could provide a safety net against an unexpected shift towards risk-taking. The tension between a safe-haven dollar and a dovish Fed offers the chance for sharp price fluctuations. The US Dollar Index (DXY) has been unstable, recently resting around 105.50, reflecting this uncertainty. This environment suggests that traders could benefit from a volatility play, like a long straddle, which is likely to be effective if significant price movements occur, though direction remains unclear. Create your live VT Markets account and start trading now.

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China’s gold reserves rose slightly to 74.09 million fine troy ounces in October, according to the People’s Bank of China. This is a small increase from 74.06 million ounces at the end of September, bringing the reserves’ value to about $297.21 billion, up from $283.29 billion the month before. At the time of this report, gold prices climbed by 0.7% to around $4,010 per ounce. Gold is typically seen as a valuable asset, especially during economic uncertainty, serving as a protection against inflation and currency decline.

Gold Reserves As A Hedge

Central banks in emerging economies, like China, India, and Turkey, maintain large gold reserves to boost their economics and diversify investments. In 2022, central banks worldwide added 1,136 tonnes of gold, marking the highest annual increase ever recorded. Gold prices usually go up when the US Dollar and Treasury yields go down. Several factors, such as geopolitical issues, economic conditions, and interest rates, affect gold prices. Generally, lower interest rates lead to higher gold prices, while a strong stock market might cause prices to drop. The People’s Bank of China continued to add gold to its reserves in October, confirming its strategy to diversify assets. Although the increase was minor, it offers stable support for the market, showing ongoing demand from the official sector even at higher prices.

Interest Rates And Gold Market

With gold trading near $4,010 an ounce, the market is reacting to changes in monetary policy. The Federal Reserve decided last week to keep interest rates steady, and with inflation data for October showing core CPI at 3.5%, speculation that the tightening cycle may be over has increased. This shift makes non-yielding gold more appealing to investors. This sentiment is affecting currency and bond markets, which traders must monitor closely. The US Dollar Index has fallen nearly 2.5% over the last month, trading around 102, providing a boost for gold. Simultaneously, the yield on the 10-year US Treasury has dropped to 3.9%, reducing the cost of holding gold. Investor confidence is also growing after a quieter period earlier in the year. Global gold-backed ETFs have gained over 20 tonnes in the past month, marking the first major inflow since spring. This trend suggests renewed interest from both institutional and retail investors, which could drive prices higher. Considering these factors, volatility in the gold options market is increasing. Traders should explore strategies that capitalize on potential price gains while also protecting against unexpected short-term drops. Consistent buying from central banks offers a safety net, while changing interest rate forecasts may spark future gains. Create your live VT Markets account and start trading now.

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Factors Affecting WTI Oil Prices

WTI Oil prices are mainly influenced by supply and demand. Global economic growth affects demand, while events like political instability can disrupt supply. The strength of the US Dollar is also important because oil is mainly traded in dollars. Weekly oil inventory reports from the American Petroleum Institute and the Energy Information Administration impact WTI Oil prices. When inventories drop, it indicates higher demand and pushes prices up. On the other hand, rising inventories usually lower prices. OPEC’s production decisions also play a big role. Changes in production quotas can either tighten or loosen supply, altering prices. OPEC+ includes non-OPEC members, like Russia, which further influences these factors. Recently, WTI crude oil jumped to $60.04 due to new inventory data. The Energy Information Administration’s report on November 5th revealed a surprising decrease of 2.1 million barrels, while analysts expected a small increase. This indicates that demand is exceeding supply more than was anticipated by the market.

Upcoming OPEC+ Meeting

The demand landscape is complicated, creating uncertainty for the next few weeks. Last month, the International Monetary Fund (IMF) slightly lowered its global growth forecast for 2026 to 2.9%, hinting at a potential decline in oil demand. However, current consumption remains strong, especially in emerging Asian markets, which helps support prices for now. On the supply side, all attention is on the upcoming OPEC+ meeting set for December 4th in Vienna. There are rumors of a split among members, with some wanting to increase production quotas while key players want to maintain current levels to keep prices above $60. This meeting could bring significant volatility to the oil market. Additionally, the US Dollar’s value is helping lift crude prices. After the Federal Reserve suggested a possible pause in interest rate hikes for the first quarter of 2026, the US Dollar Index (DXY) fell to around 103.5. A weaker dollar makes oil cheaper for those using other currencies, generally raising demand. Reflecting on the years 2020 to 2023, we learned how quickly supply and demand shocks can affect the market. The price surge following the events of 2022 reminds us that geopolitical risks can emerge suddenly. While the current market seems calmer, we must be aware of underlying tensions. In the upcoming weeks, we should explore strategies that take advantage of this upward trend while protecting against the uncertainty of the OPEC+ meeting. Using options to buy call spreads might allow for gains if WTI hits the $65 resistance level, while also limiting risk if the meeting results are negative. We see the current $60 price as an important psychological support level to monitor. Create your live VT Markets account and start trading now.

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The US Dollar steadied on Friday morning in Europe after falling against major currencies on Thursday. Attention now turns to labor market data from Canada and the University of Michigan’s US Consumer Sentiment Index for November. On Thursday, Challenger, Gray & Christmas reported that US employers cut over 150,000 jobs in October. This is the largest drop for that month in over twenty years. As a result, Wall Street indexes fell significantly, and the USD Index dropped by 0.5%, settling around 99.80 on Friday.

Bank Of England Keeps Policy Rate

The Bank of England maintained its policy rate at 4% in November, as expected. Four committee members supported a 25-basis-point rate cut. Initially, this news negatively impacted the Pound Sterling, but Governor Andrew Bailey’s cautious remarks helped it recover. Currently, GBP/USD is trading above 1.3100 after a strong gain on Thursday. Meanwhile, EUR/USD rose by about 0.5% on Thursday and remains steady below 1.1550. Data from China showed weaker-than-expected export and import growth, pushing AUD/USD closer to 0.6500. Gold is steady above $4,000, and USD/JPY is performing well near 153.50. The recent large job cuts, the biggest for an October in over twenty years, are a serious warning for the US economy. Weakness in the labor market—especially in tech and retail—poses a challenge to the Federal Reserve’s strict policy. We may need to consider the possibility of a policy shift sooner than expected. This worry is intensified by last week’s official jobs report, which revealed only 85,000 jobs were added in October, significantly below expectations. With CPI inflation still hovering around 3.5%, the Fed finds itself in a tough spot. This situation brings back memories of stagflation fears from 2022 but now comes with actual job losses.

Market Volatility And The Fed’s Dilemma

Given this uncertainty, we should expect increased volatility in interest rate and currency markets in the coming weeks. Traders might consider buying put options on the US Dollar Index as a direct bet on a Fed policy shift. The upcoming University of Michigan Consumer Sentiment Index will be a crucial indicator; a disappointing result would strengthen the bearish outlook for the dollar. Gold’s strength, staying above $4,000 an ounce, reflects these concerns. This pricing indicates that investors are seeking safety from ongoing inflation and a possible economic downturn. A less aggressive Fed historically boosts gold prices since it lowers the opportunity cost of holding this non-yielding asset. In this context, the recent strength of the British Pound appears delicate. Four BoE members have already voted for a rate cut. While Governor Bailey’s comments provided temporary support, the UK economy is likely to feel the impact of a US slowdown. The rise in EUR/USD seems more tied to general dollar weakness than any notable strength of the Euro at this time. Create your live VT Markets account and start trading now.

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In September, Germany’s exports increased by 1.4%, exceeding the expected growth of 0.5%. This shows a positive trend in German trade for the month. European markets saw changes, with the EUR/USD falling below 1.1550. This drop was caused by a recovery in the US Dollar, influenced by weak US jobs data and sell-offs in the tech sector. The Pound Sterling also faced pressure due to the Bank of England’s choice to keep interest rates unchanged.

Market Stability

Gold prices stayed above $4,000, driven by safe-haven demand amid worries about US economic policies and a possible government shutdown. Meanwhile, Dogecoin remained stable, trading above $0.1600, as a Bitwise Dogecoin ETF launch is anticipated. Mixed signals from central banks and global events are affecting broader markets. Upcoming central bank meetings and US economic data releases are likely to further impact market dynamics. Various analyses predict different futures for currencies and commodities. Traders should do thorough research and understand market risks since future predictions can be uncertain. Navigating fluctuating markets requires careful attention to both financial and psychological factors.

Eurozone Resilience

Germany’s strong export numbers for September suggest the Eurozone may be more resilient than expected. This, along with a recent rise in the ZEW Economic Sentiment surveys for November 2025, indicates underlying strength. It may be wise to consider call options on the euro in anticipation of a potential rally if the current strength of the US dollar is temporary. However, the American economy is showing warning signs, which explains the market’s cautious attitude. The latest jobs report from October 2025 revealed a disappointing gain of only 95,000 jobs, significantly below predictions and raising concerns about a slowdown. Coupled with the ongoing US government shutdown, this is why gold remains firmly above $4,000 an ounce, making long positions on gold a reasonable hedge against further instability. The British pound is under pressure after the Bank of England’s close 5-4 vote to keep interest rates steady. This cautious approach follows UK inflation data, which was low at 1.8% for October 2025. Historical trends show that similar dovish decisions in the late 2010s led to sterling weakness, making put options on GBP/USD an appealing strategy. With these mixed economic signals, we expect market volatility to persist. The VIX, which measures market fear, is around 22, well above its long-term average, indicating trader anxiety. This heightened environment suggests that options strategies aimed at profiting from significant price fluctuations, like straddles on major indices, could be effective in the coming weeks. In addition to traditional markets, speculative moves driven by specific events are emerging. The expected launch of a spot Dogecoin ETF in the next few weeks is generating excitement and price changes. For risk-tolerant traders, this presents a clear opportunity to engage using derivatives that manage the inherent volatility. Create your live VT Markets account and start trading now.

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In October, Halifax House Prices in the UK increased by 0.6%, exceeding market expectations of just 0.1%. This indicates a stronger-than-expected performance in the UK housing market for the month. In the currency markets, the Euro struggled to stay above 1.1550 against the US Dollar. At the same time, the GBP faced pressure around 1.3100 after the Bank of England chose to maintain interest rates. This was due to various market factors, including the rise of the US Dollar.

Performance of Precious Metals and Cryptocurrencies

Gold held steady above $4,000, supported by economic worries and hopes for a rate cut by the Federal Reserve. In cryptocurrencies, Dogecoin stabilized above $0.1600, potentially influenced by news about upcoming ETF developments. Globally, other economic indicators and central bank decisions will likely affect currency movements. Traders are keeping a close eye on economic data from Canada and China. Overall, market sentiment is cautious as everyone anticipates more updates on US policy and international trade tensions. The unexpected 0.6% increase in UK house prices for October presents a complicated picture. This strong signal from the domestic market directly opposes the Bank of England’s recent decision to keep interest rates low. It makes the future direction of UK rates uncertain, usually leading to more market volatility. House prices have shown resilience since the downturn in 2023, but this latest increase adds to the Bank’s challenges. The latest data from the ONS in September showed inflation at 3.1%, which is still above the 2% target. This housing strength complicates the decision for any future rate cuts. The market is caught between lasting inflation and the Bank’s careful approach.

Subscriber and Currency Market Impact

The last rate vote resulted in a tight 5-4 split, the closest we’ve seen in over two years, so uncertainty remains. Derivative traders should consider options on SONIA futures to guard against sudden price swings. The division within the Bank indicates that the next decision could surprise the market. For the pound, the Bank of England’s cautious stance continues to weigh it down, keeping GBP/USD weak near the 1.3100 level. It might be wise to use put options on sterling to protect against global risk aversion, as a weak US jobs report could further strengthen the dollar. Historically, we’ve seen implied volatility on sterling options rise by over 15% around such divided BoE meetings, and similar conditions are expected now. Create your live VT Markets account and start trading now.

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