The month of August is usually tough for GBP/USD and AUD/USD, but this year both have shown growth. At the start of August, GBP/USD rose by 1.8%, while AUD/USD increased by 1.5%. Since 2004, GBP/USD has had only six positive Augusts, and AUD/USD has had four in the past 20 years.

Impact of Seasonal Trends

Both currency pairs performed well in August 2024 and look set to continue this trend in 2025, despite their typical weak performance. Seasonal trends are significant, but recent market activities are also playing a big role. The US dollar dropped after a disappointing labor market report, which has led to expectations that the Federal Reserve might cut rates. This shift is affecting both GBP/USD and AUD/USD. The Bank of England made a firm rate decision recently but is likely to pause in September, with potential cuts in November. Improved market risk sentiment has helped boost the Australian dollar, thanks to strong stock markets. Looking ahead, the upcoming US CPI report will be crucial in determining the dollar’s direction and will influence trade dynamics for the rest of August. August often sees the British pound and the Australian dollar struggle against the US dollar. Since 2004, GBP/USD has had gains in just six Augusts, and AUD/USD has recorded gains four times. However, after a positive August in 2024, both currencies are starting this month on a strong note. A key concern is the weakness of the US dollar, which traders should monitor closely. The labor report from last Friday, August 1st, was disappointing, reporting only 95,000 new jobs and an increase in the unemployment rate to 4.2%. This has led the market to expect the Federal Reserve will cut interest rates soon to support the economy.

Trading Opportunities Amid Market Changes

For traders focused on GBP, the Bank of England’s recent decision presents a clear opportunity. Although the BOE cut its rate yesterday, a 6-3 vote indicates there’s some disagreement, suggesting a possible pause in cuts for September. This contrasts with expectations of rate cuts from the US Fed, likely benefiting GBP/USD. At the same time, the Australian dollar is gaining from a positive sentiment in global markets, which traders should keep in mind. The anticipation of Fed rate cuts has been viewed favorably by the stock market, with the S&P 500 rising 2.1% since last Friday. This positive sentiment is currently overshadowing worries about the Reserve Bank of Australia, which is expected to lower its interest rate next week. Next week’s US inflation data, specifically the Consumer Price Index, will be crucial. A weak reading would confirm the lackluster economic outlook from the labor report and could speed up the dollar’s decline. This report will play a key role in shaping trading strategies for the rest of August. Create your live VT Markets account and start trading now.

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Market pricing has changed recently due to new data and events. This has affected expectations for central bank rate adjustments by the end of the year. For the Federal Reserve, a cut of 59 basis points is likely, with a 92% chance of a reduction at the next meeting. The European Central Bank (ECB) is looking at a 13 basis points cut and has an 88% chance of maintaining current rates for a while. The Bank of England expects an 18 basis points cut, with a 95% probability of keeping rates the same at their next meeting. The Bank of Canada is anticipating a 20 basis points cut but sees a 72% chance of no changes immediately. The Reserve Bank of Australia may cut rates by 63 basis points, with a 98% probability of that happening soon. Meanwhile, the Reserve Bank of New Zealand is predicting a 41 basis points cut, with an 88% chance of a cut at the upcoming meeting. The Swiss National Bank expects a 12 basis points cut, with an 84% probability of holding current rates steady.

Bank Of Japan Rate Expectations

The Bank of Japan plans to raise rates by 13 basis points and has a 90% probability of not changing rates soon. The recent rate cut by the Bank of England came as a surprise due to their more aggressive stance. Attention is now shifting to the upcoming US Consumer Price Index (CPI) report and the Jackson Hole Symposium. Given the current market conditions as of August 8th, 2025, we think traders should prepare for a weaker US dollar. The market predicts a 59 basis point cut from the Federal Reserve by year-end, with a 92% chance of a cut at the next meeting. This expectation follows last week’s weak Non-Farm Payrolls report, which indicated slower-than-expected job growth. The Australian and New Zealand dollars may also weaken, as their central banks are expected to cut rates aggressively. There’s a 98% probability for a rate cut from the Reserve Bank of Australia at its next meeting, driven by recent data showing domestic inflation decreasing quicker than expected. This stands in stark contrast to other major central banks that are maintaining their rates.

Europe’s Economic Stance

In Europe, we expect the ECB and the Bank of England to keep rates steady in the near future. Recent inflation rates in the Eurozone and the UK, both lingering above 2.5%, support this cautious approach. This difference in policies may strengthen the euro and the pound against the US, Australian, and New Zealand dollars. The main focus now is next Tuesday’s US Consumer Price Index report, which will be crucial for the Fed’s direction. We anticipate increased volatility around this report, and traders might consider using options to protect their positions. We remember how the Jackson Hole Symposium in August 2022 caused significant market movements, and this year’s event later this month could have a similar impact. The Bank of Japan stands out as the main exception, with the market anticipating a modest 13 basis point hike by the year’s end. This follows a year of Japanese core inflation staying above the 2% target, marking a significant change from the deflationary trends seen in early 2020s. Any unexpected hawkish move from the BoJ could result in a sharp rise in the yen. Create your live VT Markets account and start trading now.

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**Bitcoin’s Technical Analysis Overview** Bitcoin had a good week thanks to encouraging comments from Federal Reserve members and an executive order from Trump allowing cryptocurrencies in retirement plans. Fed’s Williams mentioned a potential rate cut in September, supported by Fed’s Daly and Kashkari, citing employment data. The executive order from Trump sparked a rally in Bitcoin and other cryptocurrencies. Now, all eyes are on the upcoming US CPI report, which could affect expectations for rate cuts. If the CPI is lower than expected, it might increase the chances of a September rate cut, possibly hinted at by Fed Chair Powell at the Jackson Hole Symposium. On the other hand, higher CPI numbers could lead to a cautious market reaction, which may impact risk assets. In technical terms, the daily chart shows that Bitcoin bounced back from a crucial trendline near the 112,000 level. It’s now pushing toward a downward trendline. Sellers may take positions above this line, while buyers hope for a breakout. The 4-hour chart points out resistance around the 116,000 zone; buyers are looking for a breakout, while sellers expect a dip. On the 1-hour chart, a small upward trendline shows positive momentum, with both buyers and sellers planning their moves around this trendline. **Potential Impact of the US CPI Report** Given the Fed’s dovish tone and potential new demand from retirement funds, we should brace for a significant market move. Currently, the market sees over an 80% chance of a 25 basis point cut in September, according to CME FedWatch data. With over $10 trillion in assets tied up in US 401(k) plans by early 2025, even a small investment in crypto could lead to consistent buying pressure. Next week’s US CPI report will be crucial for the Fed’s September decision. Remember how persistent inflation was in 2023 and 2024; an unexpectedly high CPI could damage recent market optimism. Conversely, a lower-than-expected reading would likely be reinforced by Chair Powell at Jackson Hole, boosting risk assets. Bitcoin has surged from the significant $112,000 trendline and is now challenging key downward resistance. This marks a decisive moment for derivative traders: a failure here could lead to short-term put buying, while a strong breakout might drive Bitcoin towards new all-time highs. A move above this trendline would negate the bearish outlook for now. **Strategies for Buying and Selling Bitcoin** For those considering a long position, the $116,000 area presents a possible entry point if there’s a pullback from resistance. However, if the price dips below this support, it could indicate weakness and reinforce the case for a drop back to the $112,000 trendline, which is a crucial level for buyers to hold. Due to the uncertain nature of the forthcoming CPI report, we are seeing rising implied volatility in the options market. Traders may want to explore buying straddles or strangles to take advantage of the expected price swings, profiting from significant movements in either direction. This strategy is effective when a big price shift is anticipated but the direction remains unclear. In the short term, we’ll focus on the minor upward trendline in the hourly chart for signs of momentum. If this line breaks, it could signal that the overhead resistance is holding, giving sellers a chance to act before a larger pullback occurs. Create your live VT Markets account and start trading now.

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The trading session has started slowly, with major currencies showing little change in a calm risk environment. Traders are trying to make back losses from last Friday, caused by disappointing US ISM services PMI data, which has led to a gradual decline of the dollar. Today’s changes in currency values are small, continuing the trend of a weaker dollar after last week’s poor job data. Most dollar pairs are leaning towards selling the dollar, except for USD/CHF, which is affected by Swiss tariffs.

Currency Movements

EUR/USD is up 0.6% this week, maintaining its position above key hourly moving averages (100-hour at 1.1607, 200-hour at 1.1552). GBP/USD has increased by 1.3% this week and is also above its important hourly averages (100-hour at 1.3337, 200-hour at 1.3307). On the other hand, USD/CHF is up 0.5%, positioned between its key averages (100-hour at 0.8073, 200-hour at 0.8082). AUD/USD and NZD/USD have risen by 1.0% and 0.9%, respectively, also above their key hourly averages. The trend against the dollar is likely to continue until the US CPI report is released, a key moment for those looking for a dollar rebound. The recent downturn for the dollar appears justified based on the latest data. The US economy added only 95,000 jobs in July 2025, which was much lower than expected and indicates a cooling labor market. This was worsened by the ISM services report dropping to 50.8, its lowest level in over a year. This situation leads us to believe it’s wise to position against the dollar as we approach next week. Derivative traders might think about buying call options on pairs like EUR/USD and AUD/USD to take advantage of potential upward movement with limited risk. The technical indicators support this, as most major pairs are holding above their key short-term moving averages.

Market Strategies

The current quiet market presents a chance, as volatility seems inexpensive. The Cboe FX Volatility Index (FXVIX) has dropped to 6.5, indicating that options may not be fully reflecting the potential excitement surrounding the upcoming CPI data. Buying straddles or strangles on EUR/USD could be a strategy to profit from significant movement in either direction during the event. This scenario reminds us of summer 2023 when weak inflation data led to a sharp drop in the dollar. This historical context tells us to be cautious of being on the wrong side if next week’s CPI data is soft. If the Core CPI for July misses the forecast of 0.3% month-over-month, it could speed up the current trend. While most dollar pairs appear weak, we need to be careful with USD/CHF because of the specific pressures from Swiss tariffs. Nonetheless, the major focus for all dollar pairs is the US inflation report coming next week. A number higher than expected poses a significant risk that could quickly change the current narrative of dollar selling. Create your live VT Markets account and start trading now.

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This week, gold’s upward momentum has slowed as traders wait for the US CPI data. A weak Non-Farm Payroll report led to lower interest rate expectations, allowing gold to rise as real yields fell. The upcoming CPI data might impact future rate cuts, with lower numbers supporting dovish bets and possibly indicating a third cut by the year-end. On the flip side, higher CPI numbers could lead to a hawkish shift, affecting gold’s value. In a broader view, gold is likely to maintain an upward trend as real yields decrease alongside the Federal Reserve easing. However, any hawkish changes in interest rate expectations may cause short-term corrections. On the daily chart, gold is nearing a resistance level of around 3,438 after rebounding near the 3,245 support level. Sellers could enter at this resistance, while buyers hope for a breakout to reach a new all-time high.

Gold Price Charts

The 4-hour chart shows that bullish momentum is fading without clear trading levels. The 1-hour chart reveals a slight upward trendline that supports the bullish momentum. Buyers will likely use this trendline to aim for resistance, while sellers will target a break below it to secure a pullback to the 3,350 level. Gold’s recent rise has started to lose steam as we shift focus to next week’s important US CPI inflation data. The rally began after last week’s weak Non-Farm Payrolls report, which indicated that the US economy added only 110,000 jobs in July, far below expectations. This disappointing job report increased the likelihood that the Federal Reserve would cut interest rates soon. More Fed officials have begun to indicate they are open to rate cuts since that report. Market pricing now shows a 75% chance of a rate cut at the September Fed meeting, up from about 40% before the jobs data. A weak inflation report next week could solidify that September cut. If the CPI data comes in lower than expected, markets will likely reinforce their bets on lower rates, which would be good for gold. However, if inflation rates are higher than anticipated, it could lead to a quick shift, negatively impacting gold in the short term. This scenario would likely keep prices within a recent range.

Market Insights

In the broader context, gold’s overall trend should remain upward. The Fed is expected to continue its easing cycle through the end of 2025, which should keep real yields under pressure. However, any unexpected hawkish news could lead to temporary pullbacks. In the daily chart, we see gold is inching toward a resistance level around $3,438. This level is just above the previous all-time high reached in May 2025, making it an important threshold. Sellers are likely to monitor this area to enter new positions, while buyers will look for a clear breakout. In the very short term, upward momentum appears weak, as if it’s climbing with inertia. A minor upward trendline is currently supporting the price on the one-hour chart. If that trendline breaks, sellers may aim for a quick drop back toward the $3,350 level. Create your live VT Markets account and start trading now.

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European stocks opened cautiously as the week comes to an end. Key indexes had mixed results: the Eurostoxx was steady, Germany’s DAX fell by 0.2%, while France’s CAC 40 rose by 0.2%. In the UK, the FTSE climbed by 0.1%. Spain’s IBEX and Italy’s FTSE MIB also saw gains, rising by 0.4% and 0.3% respectively. This modest performance follows Wall Street’s mixed outcomes, where tech stocks provided some support.

Optimism For S&P 500 Futures

Despite the mixed signals, European stocks had a good week, recovering some losses from the previous week. In the US, S&P 500 futures reflect slight optimism, showing a 0.2% increase. Traders are closely watching news regarding gold tariffs as the day progresses. The mixed atmosphere in European markets indicates that traders are cautious and hesitant, avoiding significant risks before the weekend. This wariness is largely due to unclear news on global gold tariffs. This indecision is evident in low trading volumes, which have dropped nearly 15% from last month’s daily average. With the Euro STOXX Volatility Index (VSTOXX) at a calm 19.2, there is a chance for traders who anticipate market movements. The current low implied volatility makes options strategies, like straddles on the DAX or CAC 40, appealing for a potential increase in volatility. We believe the market may be underestimating the risk of an unexpected announcement regarding tariffs next week.

Inflation Concerns And ECB Response

This caution follows the July inflation report for the Eurozone, which showed core inflation stubbornly holding at 3.1%. This complicates the European Central Bank’s (ECB) strategy. While the ECB is signaling a data-driven pause, ongoing inflation limits their ability to support markets if trade tensions intensify. Currently, the swaps market estimates a 35% chance for one last rate hike by October, up from 20% two weeks ago. We’ve seen similar volatility driven by headlines during trade disputes in 2018 and 2019, where indexes could swing significantly on a single announcement. For traders with long equity positions, buying protective puts on broad indexes like the Eurostoxx 50 is a cost-effective way to hedge against a sudden downturn. Recent buying may be shaky if geopolitical news turns negative. The DAX’s specific weakness, due to its focus on exporters, highlights the most significant risk areas. A wise approach could involve pairing trades—going long on a more domestically focused index like Spain’s IBEX while shorting the DAX. This strategy allows traders to capture relative performance while reducing some broader market risks tied to tariff outcomes. Create your live VT Markets account and start trading now.

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Switzerland’s consumer sentiment changed little in July, standing at -32.8, just down from -32.2 in June. The forecast for the third quarter is -28, which is better than the -39 recorded in the second quarter. Recent events, including a decision on tariffs for Swiss gold, have raised concerns. This could also affect the pharmaceutical industry in the future.

The Impact On Consumer Sentiment

The July consumer sentiment figure of -32.8 shows Swiss households are quite pessimistic. Although the change from last month is small, it confirms a trend of weak confidence that has been ongoing. This consistent negativity is likely to dampen retail spending in the weeks ahead. This weak data suggests that the Swiss National Bank is unlikely to raise interest rates. With Swiss inflation at 1.3% as of July 2025, the central bank is more concerned about economic weakness rather than rising prices. This is a shift from the aggressive rate hikes we saw in 2023 when inflation was a major worry. This economic situation will likely put pressure on the Swiss Franc. The EUR/CHF exchange rate has already risen from 0.96 early in the year to around 0.9850 recently. Traders might want to consider strategies that benefit from a weaker Franc, such as buying call options on the EUR/CHF pair. In terms of stocks, the Swiss Market Index (SMI) has struggled, dropping nearly 4% since early June 2025. This decline reflects the poor consumer mood and the new worries about trade. The market is anxious that the gold tariffs may influence other key industries.

Concerns Over The Pharmaceutical Sector

The potential impact on the pharmaceutical sector is particularly concerning for the Swiss market. It’s important to note that just two companies, Novartis and Roche, make up over 30% of the SMI. If their big export business is affected, it could pose a serious threat to the entire index. Given this risk, traders might consider buying protective put options on the SMI as a hedge against a market downturn if the tariff situation worsens. Purchasing puts on individual pharmaceutical stocks could also offer a targeted response to this uncertainty. Despite the current challenges, the official forecast for consumer sentiment is expected to improve to -28. This marks a significant recovery from the -39 seen in the second quarter of 2025. While the situation appears bleak right now, there may be hope for better news later this year. Create your live VT Markets account and start trading now.

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Apple’s stock rose over 9% this week due to new U.S. manufacturing investments and tariff exemptions. According to the tradeCompass forecast, it remains bullish as long as the stock stays above $213.50, aiming for a target range of $238.50 to $241.50. If it closes below $213.50 for two consecutive days, the outlook will become bearish. The increase in Apple shares follows major investments in U.S. manufacturing and positive trade news. On August 6, Apple announced an additional $100 billion for its American Manufacturing Program, bringing its total U.S. investment to $600 billion over four years. This investment includes upgrades in chip production, glass manufacturing, and expanded research facilities. The Wall Street Journal reported that President Trump exempted large tech companies, including Apple, from 100% tariffs on semiconductor imports, as long as they commit to U.S. manufacturing. This exemption helps Apple avoid trade risks and encourages domestic growth. As a result of this news, Apple shares increased over 5% on the announcement, followed by another 3% gain the next day. The target zone of $238.50 to $241.50 is where traders may start taking profits or short positions. Longer-term targets are set at $248.50 and $255.00, where selling pressure may occur. As of August 8, 2025, Apple stock showed a weekly gain of 5.54% and a 10.57% increase over three months. However, it remains down 11.61% year-to-date, indicating potential for recovery. With the recent 9% rally, Apple signals a bullish trend as long as it stays above $213.50. This movement is supported by the significant $100 billion U.S. manufacturing investment and important tariff exemptions. In the coming weeks, this presents an opportunity to aim for our first target zone of $238.50 to $241.50. We should consider buying call options set to expire in September or October 2025 to take advantage of this potential upward movement. The implied volatility for Apple options is currently moderate, making premiums reasonable since the CBOE Volatility Index (VIX) fell below 15 last week. This allows us to establish bullish positions without paying too much for the insurance. The target range of $238.50 to $241.50 is a smart spot to consider taking some profits. We might create bull call spreads with a short strike within this range to reduce costs and clarify our maximum gain. In past situations involving similar investments from Apple in the late 2010s, the stock often stabilized at resistance levels before continuing its upward trend. Our risk is defined by the support level of $213.50. Two daily closes below this price would indicate that the bullish momentum has faded, prompting us to exit our call positions. At that point, switching to put options could be a wise strategy to guard against a downturn. This technical setup also benefits from a favorable market environment. The July 2025 inflation report was better than expected, reducing fears of aggressive action from the Federal Reserve. Additionally, Apple’s earnings report from late July highlighted strong growth in its high-margin Services division. These elements provide a strong fundamental basis for a bullish technical outlook.

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During the European session, the only data released will be from Swiss consumer confidence, but it is not expected to impact the market significantly. In the American session, the focus shifts to the Canadian employment report. Analysts predict that 13,500 jobs will be added in July, a big drop from the 83,100 jobs added previously. The unemployment rate is expected to rise from 6.9% to 7.0%.

Bank of Canada Holds Steady

The Bank of Canada has stopped making changes as inflation is back near the high end of their 1-3% target. Current data does not show a need for additional rate cuts right now. The market sees a 61% chance of a rate cut in December. Unless upcoming data shows major surprises, this expectation is unlikely to change much. With the focus on North America today, August 8, 2025, the Canadian employment report is central. The forecast is for a modest report, with only 13,500 new jobs expected—a significant decline from last month’s total. This suggests that unless the numbers vary greatly, the market reaction may be muted. Since little volatility is expected in today’s data release, implied volatility for Canadian dollar options might decrease if the numbers match forecasts. Traders might find an opportunity to sell volatility using strategies like short straddles on the USD/CAD pair. The goal would be to earn the premium as option values decline in a stable market.

Market Strategies in Focus

This viewpoint aligns with the Bank of Canada’s current policy of holding steady. With the latest Consumer Price Index (CPI) inflation figures for July 2025 at 2.9%, inflation is at the upper end of the Bank’s target range. This leaves little reason to signal a near-term rate cut, stabilizing the currency for the moment. However, a surprising drop in jobs, such as a negative employment report, could change things quickly. This would likely increase the current 61% likelihood of a December rate cut and might even push it earlier. In that case, we could see the Canadian dollar weaken, making long USD/CAD positions or buying CAD put options smart strategies. Conversely, a strong jobs report could have a greater impact by challenging the dovish outlook. A quick look back to spring 2025 shows how a surprise surge in jobs led to a sharp rally in the Canadian dollar. If this strength repeats, it could wipe out rate cut expectations for the year and push USD/CAD down sharply. In the coming weeks, we’ll closely watch how Bank of Canada officials respond to today’s employment data. The figures will set the tone, but their insights will shape market expectations for the rest of the quarter. Any signs of growing concern about weak growth or ongoing inflation will guide our trading positions. Create your live VT Markets account and start trading now.

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