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In July, the Core Consumer Price Index in the United States increased to 328.66 from 327.6.
The United States Consumer Price Index (CPI) Core rose to 328.66 in July, up from 327.6 in June. This increase highlights ongoing changes in the economy and their effects on prices.
In other economic news, the AUD/USD regained strength after a rate cut by the Reserve Bank of Australia, while US CPI figures varied in July. At the same time, the EUR/USD improved, nearing 1.1700, following a weaker US Dollar and speculation about future Federal Reserve decisions.
In July, the US Core Consumer Price Index increased to 328.98 from 327.6.
The Consumer Price Index (CPI) for Core S.A. in the United States rose to 328.98 in July, up from the previous 327.6. The changes in major trading pairs and commodities are responses to shifts in economic indicators and central bank policies.
Despite a rate cut by the Reserve Bank of Australia, AUD/USD has regained momentum. Meanwhile, EUR/USD has bounced back to around 1.17, influenced by fluctuations in the US Dollar and CPI data.
Gold Value Recovery
Gold’s price has recovered to $3,350 per ounce, driven by pressures on the US Dollar. Ripple’s price has slightly dipped to $3.18 as the market awaits inflation data. The Bank of England lowered interest rates by 25 basis points to 4%, with officials expressing concerns about ongoing inflation. Many brokers are being assessed for 2025 trading, providing competitive spreads and platforms across various markets, including Forex, CFDs, and cryptocurrencies. Forex trading carries significant risk, including the potential loss of your initial investment. The market analysis and views shared here are general financial commentary and should not be seen as specific investment advice. US inflation remains persistent, with the Core Consumer Price Index for July 2025 showing another increase. This rise to 328.98 follows aggressive rate hikes in 2023 and 2024, prompting questions about whether the Federal Reserve has completed its work. The latest Non-Farm Payrolls report added a solid 215,000 jobs, which might give the Fed a reason to maintain a hawkish stance.Market Reaction and Trading Strategy
Market reactions are sending mixed signals and show uncertainty about the Fed’s next steps. Typically, a stronger dollar is expected when inflation is high; however, we’ve seen gold prices rise and EUR/USD rebound towards 1.17. This indicates that traders may not fully believe the Fed will tighten policies further, resulting in a tense market environment. Given this uncertainty, trading based on volatility seems like a wise strategy for the upcoming weeks. The VIX, a measure of market fear, has climbed to about 19, indicating increasing anxiety ahead of the next central bank meetings. Options strategies such as straddles on major indices or currency pairs can be advantageous, as they profit from significant price movements in either direction. Gold’s rise to $3,350 an ounce is particularly significant as it occurs despite potential strength in the US dollar. This trend suggests that more investors are using gold as a hedge against inflation, which central banks might struggle to manage. This pattern echoes past inflationary years when traders lost faith in monetary policy and turned to hard assets. In currency markets, there is a clear opportunity to short the British Pound after the Bank of England’s rate cut. The bank’s decision to lower rates to 4% while acknowledging concerns about “persistent inflation” implies weakness for the pound. Conversely, the AUD/USD’s ability to strengthen despite its own central bank cutting rates shows it is influenced more by overall US dollar sentiment than its own economic fundamentals. Create your live VT Markets account and start trading now.Technical progress boosts Netflix’s shares and increases investor optimism
Netflix shares reached their highest point on July 1 but then entered a downward trend, dropping from $1,341.15 to a low of $1,144, just above the 38.2% retracement level. After hitting that low on August 5, the stock started to recover, breaking through key resistance levels like the 50-hour and 100-hour moving averages. It is now facing the challenge of the 200-hour moving average.
Tomorrow’s stock performance is crucial for maintaining the current rally, with a potential target of $1,242.93, the 50% midpoint. However, if it fails to hold above the 200-hour moving average, the stock may dip back to around $1,200. Netflix’s impressive lineup, such as Squid Game Season 3 and other hit series, has driven strong viewer engagement and kept subscribers coming back.
To keep up the momentum, Netflix is releasing new shows like Wednesday Season 2 and other major originals. The company’s strategy to create local content has led to a €1 billion investment in Spanish programming, boosting its international presence. Additionally, its growing ad-supported tier and foreign exchange gains have increased international sales, prompting a higher revenue forecast for 2025, projected between $44.8 billion and $45.2 billion.
As of August 12, 2025, Netflix is at an important technical point after rebounding from its early August low. The stock is fighting to remain above the 200-hour moving average, a crucial battleground. If it can maintain its upward trajectory, it might reach the $1,242.93 level in the coming weeks.
Traders feeling optimistic might consider buying call options. If the stock breaks through current resistance, this could trigger a rapid rise. Recent options data shows that 30-day implied volatility for Netflix is now around 29%, down from over 35% during the July decline, making calls less expensive. We would recommend focusing on September expirations with strike prices around $1,250 to capitalize on a potential move toward the 50% retracement target.
For those who prefer a more cautious approach, a bull call spread could help manage risk while still allowing for potential upside. This involves buying a call with a $1,220 strike price and selling a call with a $1,250 strike price, setting a clear profit zone. Yesterday’s trading volume showed increased interest in calls between these two strike prices, indicating it’s a popular strategy.
It’s important to recognize the risk if the stock fails at this technical level, as this could push the price back toward the $1,200 support area. To hedge against a long position or to bet on a decline, buying put options with a $1,200 strike expiring in late August would be a sensible strategy. A similar situation occurred in late 2024, when a failure at the 200-hour moving average after a strong rally led to a quick 10% drop within a week.
This trading environment is bolstered by a broader bullish market, with the S&P 500 and NASDAQ reaching new highs today. Influential figures like Rick Rieder have shared positive outlooks. Netflix’s strong fundamentals, along with an upgraded 2025 revenue forecast of over $44 billion and a robust content lineup, provide significant support. Furthermore, data indicating the ad-supported tier’s growth, which now represents nearly 25% of new global sign-ups, further solidifies traders’ confidence.
US CPI inflation rate stays at 2.7%, missing expectations of 2.8%
In July, US inflation, measured by the Consumer Price Index (CPI), stayed at 2.7% year-over-year, which was lower than the expected 2.8%. The monthly changes were 0.2% for CPI and 0.3% for core CPI, matching predictions.
Annual Core CPI Rise
The annual core CPI increased to 3.1%, up from 2.9% last month and higher than the market forecast of 3%. After this inflation data was released, the US Dollar Index fell by 0.15% to 98.35, with the US Dollar particularly weakening against the Swiss Franc. Analysts had expected an annual inflation rate of 2.8% in July, slightly higher than June’s 2.7%. Core CPI, which excludes food and energy, was also projected to rise by 3% annually, compared to the previous 2.9%. US inflation data can shape the Federal Reserve’s views on interest rates. According to the CME FedWatch Tool, there is a 90% chance that the Fed will cut the policy rate by 25 basis points in September, which could impact the US Dollar’s value. If headline inflation drops to 2.6% or lower, it could raise expectations for rate cuts and further affect the currency. With July’s inflation data behind us, we shift our attention to the Federal Reserve’s meeting in September. Headline inflation remained stable at 2.7%, just below expectations, while core inflation unexpectedly rose to 3.1%. This mixed message creates opportunities, as the market increasingly anticipates a rate cut. We should consider using derivatives to position ourselves for the expected 25 basis point rate cut next month. Current data from the CME FedWatch Tool on August 12, 2025, shows a nearly 90% probability for this move, making long positions in interest rate futures a key strategy. This means betting that interest rates will indeed fall as forecasted.Stock Market Impact
The expectation of lower rates has already weakened the US Dollar, which fell below the 98.00 mark on the DXY index after last month’s CPI report. Given this trend, buying put options on the dollar or call options on the Swiss Franc seems wise. This strategy will profit if the dollar continues to lose value against other major currencies. For the stock market, lower interest rates typically benefit companies by lowering borrowing costs. Reflecting on the aggressive rate hikes from 2022 to 2023, a potential cut could signal a big policy shift likely to boost equities. We can act on this by purchasing call options on the S&P 500, expecting a market rally leading up to the Fed’s decision. However, the difference between headline and core inflation adds uncertainty to the situation. If we think the Fed’s decision-making will become more heated, we might see increased market swings. To prepare, we could buy call options on the VIX, which would profit from rising market volatility in the weeks ahead. Create your live VT Markets account and start trading now.Pound Sterling strengthens against major currencies after positive labor market data
The Pound Sterling is gaining ground against major currencies following strong UK job market data for the three months ending in June. The Office for National Statistics reported that 239,000 jobs were created in the second quarter, up from 134,000 in the previous quarter.
On Monday, GBP/USD dipped slightly, ending a six-day winning streak, but it regained strength in the European session on Tuesday, trading above 1.3450. Attention is now on US inflation data and geopolitical factors, such as the US and China’s 90-day trade truce, which have been influencing the US Dollar and causing fluctuations in GBP/USD.
Different currencies are performing at varying levels, with EUR/USD approaching two-week highs of 1.1700, thanks to the weakness of the US Dollar. GBP/USD is climbing to near three-week highs of 1.3530, as pressure continues on the US Dollar ahead of upcoming CPI data releases.
Other markets are reacting to currency changes as well. Gold prices have bounced back to $3,350 per troy ounce after hitting earlier lows due to the US Dollar’s trends. The Pi Network has seen a pullback, dropping below $0.4000, suggesting possible bearish moves in the crypto market. Meanwhile, the Bank of England recently cut rates by 25 basis points to 4%, indicating caution regarding future inflation management.
With the strong UK jobs report, we can expect continued support for the Pound Sterling in the near term. The GBP/USD exchange rate is trading close to three-week highs around 1.3530, marking a significant recovery compared to 2022 and 2023 levels. We should think about buying call options to take advantage of this upward trend in the next week or so.
The main risk ahead is the US inflation data that is due soon. A lower CPI reading could weaken the US Dollar further, pushing GBP/USD and EUR/USD higher. Recent data from July 2025 showed US inflation at 2.9%, which was below what analysts expected and has already contributed to the dollar’s decline.
However, we need to be wary of the Bank of England’s recent policy decision. The cut to 4% despite strong employment data indicates concerns about future economic growth. This marks a shift from the aggressive stance they took during 2024 to tackle inflation.
This mix of positive current data and the anxiety of the central bank could lead to high market volatility. Therefore, it might be wise to consider buying straddles or strangles on GBP/USD. These positions can be profitable if the currency pair moves significantly in either direction after the US data release.
Looking at other markets, the weak dollar supports gold prices, driving them toward $3,350 an ounce. This price reflects ongoing geopolitical tensions and persistent inflation worries that we’ve seen over the past eighteen months. We can leverage this trend by taking long positions in gold futures.
In contrast, the crypto market shows signs of potential pullback, especially with weakness in assets like the Pi Network. Following the significant price swings in Bitcoin and Ethereum in the first half of 2025, being cautious seems prudent. We might consider reducing our exposure or buying put options as a hedge against a broader market correction.
WTI crude oil futures drop to $63.17, falling below important averages and thresholds
WTI crude oil futures closed down $0.79 at $63.17. The lowest price of the day was $63.06, and the highest was $64.34.
The price is drifting away from the 100-hour moving average of $64.82 and has dropped below a support level of $63.61, with a swing high at $65.27. If the price bounces back above these levels, it could indicate a shift back to buyers.
Support and Resistance Levels
If the price does not bounce back, sellers will remain in control, with the next target near the May lows around $60. Further declines could bring focus to the April and May lows close to $55.15. On August 12th, 2025, WTI crude oil fell below a key support area of $63.61. The price is moving away from its 100-hour moving average, suggesting bearish sentiment is increasing. For a recovery to happen, the price needs to reclaim the $65.27 level, but this seems unlikely at the moment. This downward trend is supported by recent news. Last week’s EIA report revealed a surprise inventory increase of 2.8 million barrels, contrary to expectations. Additionally, recent purchasing managers’ index (PMI) data from Europe and Asia revealed a slowdown in manufacturing, raising concerns about future energy demand. High U.S. shale production throughout the summer has also contributed to increased global supply.Bearish Trading Strategies
For traders using derivatives, this indicates a potential opportunity to set up bearish positions in the coming weeks. We are eyeing the May 2025 lows near the $60 mark as a significant target. Strategies like buying put options with a $60 strike price or starting bear call spreads could be effective ways to profit from this expected decline. If the market continues to weaken and drops below the psychological $60 support, the next major downside target would be near $55.15, based on the April and May 2025 lows. This kind of price drop has occurred before, particularly during the economic slowdown in late 2024, when oil prices fell nearly 15% in one quarter. The current situation appears similar, driven by real fundamentals rather than short-lived headlines. The main risk to this short-term bearish outlook would be a sudden rebound above the 100-hour moving average at $64.82. A consistent move above the $65.27 swing high would suggest that buyers are regaining control. Therefore, it’s crucial to monitor any short positions against these key technical levels. Create your live VT Markets account and start trading now.In July, the Consumer Price Index for the United States was lower than expected at 323.048.
The United States Consumer Price Index (CPI) for July, which is not adjusted for seasonal changes, reached 323.048. This is slightly below the expected 323.17. The CPI is an important measure of changes in consumer prices and offers insight into the US economy.
**Trends in Euro and British Pound**
The Euro and British Pound are both rising against the US Dollar. The EUR/USD is nearing two-week highs around 1.1700, while the GBP/USD is approaching three-week peaks around 1.3530.
The US Dollar is under pressure, affecting both foreign exchange markets and commodities like Gold. After dropping to around $3,330 per troy ounce, Gold rebounded to over $3,350.
The Bank of England unexpectedly cut interest rates by 25 basis points to 4%. However, there are still fears about inflation staying above their target for too long.
In the world of cryptocurrencies, Pi Network fell below $0.4000 after reaching a high of $0.4661 recently. A drop in trading volume may lead to a potential 10% correction, similar to what happened in July.
**Effects of the US Consumer Price Index**
The CPI for July 2025 being slightly lower than expected suggests that the Federal Reserve might pause further interest rate increases. Inflation has cooled down a bit, currently at an annual rate of about 2.9%, down from a peak of nearly 9% in mid-2022. Given this situation, we might consider using options on Fed Funds futures to prepare for steady rates rather than further increases.
As a result of the weakening US Dollar, we anticipate further declines. The Dollar Index (DXY) has dropped nearly 1.5% over the past two weeks, which is significant. We see potential in buying call options on EUR/USD and GBP/USD to benefit from their upward trends towards 1.1700 and 1.3530, respectively.
The weakness of the dollar, coupled with ongoing inflation worries, makes gold a desirable investment. The recent bounce from $3,330 shows strong support, confirming the bullish trend that started when gold surpassed its previous highs from 2024. We are considering buying call options on gold futures or gold-backed ETFs to target a rise towards $3,400 per ounce.
The Bank of England’s unexpected rate cut indicates a major policy shift and highlights weaknesses in the UK economy, even though the pound is currently strong against the dollar. UK GDP growth for the second quarter of 2025 was only 0.1%, which supports the Bank’s decision to encourage economic growth. This may be a good time to buy longer-dated put options on GBP/USD, betting that the Bank’s cautious approach will eventually affect the currency negatively.
In more speculative areas, we are becoming cautious, as seen by the decline in assets like Pi Network. Total spot trading volume on major crypto exchanges fell 18% in July 2025 compared to the previous month, indicating a decrease in risk appetite. This suggests it may be wise to limit exposure to high-volatility assets or purchase protective puts on broader market indices.
Create your live VT Markets account and start trading now.
In July, the year-on-year Consumer Price Index for the United States was 2.7%, which was lower than expected.
The Consumer Price Index (CPI) in the United States for July showed a year-on-year rate of 2.7%. This was a bit lower than the expected 2.8%. This data helps us understand inflation trends in the US economy.
In the currency markets, the EUR/USD pair neared a two-week high of about 1.1700, thanks to a weaker US Dollar and expectations of possible Federal Reserve rate cuts. Likewise, GBP/USD hit a three-week high around 1.3530 due to similar pressures on the dollar.
Commodities Sector Overview
In commodities, gold prices bounced back, rising above $3,350 per troy ounce. This increase was driven by the falling US Dollar and changes in US yield rates. Meanwhile, Pi Network slipped below $0.4000, suggesting a negative outlook as trading volume dropped and a further 10% decline seems possible. In a notable change, the Bank of England reduced interest rates by 25 basis points to 4%. They expressed worries about inflation staying above target levels. Traders and analysts are now closely evaluating how this will affect the economy moving forward. With the latest US inflation data for July 2025 being softer than expected at 2.7%, we believe the Federal Reserve now has a clearer path to lower interest rates. This supports our view that the US Dollar may weaken in the coming weeks. Market data indicates that the chances of a rate cut at the September Fed meeting have increased to over 75%. This is a significant change from just a month ago.Analysis of Currency Trends
The rise of EUR/USD toward 1.1700 is seen as the start of a larger trend, influenced by differing central bank policies. The European Central Bank held its policy rate steady at 3.5% in its last meeting, which creates a favorable interest rate advantage for the euro. We are considering buying call options on EUR/USD with a target strike price of 1.1850, set to expire in October. The situation with the British Pound is more complicated since the Bank of England just lowered its rate to 4% to help a sluggish economy. However, the weakness of the US Dollar is currently driving GBP/USD to recent highs around 1.3530. We think this rally is weak because UK core inflation remains high at 3.8%, and we need to use options wisely to manage our risk. Gold’s jump above $3,350 per ounce is linked to falling US yields and a weaker dollar, similar to trends we observed during the late 2023 policy shift. Historically, gold does well when real yields turn negative, and we are entering that environment. We are positioning ourselves by increasing our long positions in gold futures contracts. For riskier assets, the bearish outlook for Pi Network below $0.4000 is reinforced by its low trading volume. On-chain data shows a drop in active wallets, indicating that retail interest is declining quickly. This technical weakness suggests we should consider buying put options or shorting positions, as a further drop to $0.3500 seems likely. Create your live VT Markets account and start trading now.US budget deficit reaches $291 billion, exceeding expectations due to higher outlays and receipts
The US federal budget has a deficit of $291 billion, which is higher than the expected $215 billion. Last month, there was an unexpected surplus of $27 billion.
In this recent period, total spending reached $630 billion, up from July’s $574 billion. Meanwhile, receipts were $338 billion, a slight increase from July’s $330 billion.
Fiscal Year 2025 Deficit Analysis
So far in fiscal year 2025, the deficit has hit $1.629 trillion. This is higher than $1.517 trillion during the same time in fiscal year 2024. The spending in July set a new record for that month, with both year-to-date income and expenses at all-time highs. Although tariff revenue has had an effect, there haven’t been any remarks from the Trump administration regarding these budget numbers. The July deficit was much larger than expected at -$291 billion. This means the government needs to borrow more than anticipated, which may lead to higher Treasury yields in the weeks ahead. This is a familiar situation, similar to the spending spikes in 2021 that led to high inflation. With the year-to-date deficit standing at $1.629 trillion, traders should prepare for potential interest rate increases. The 10-year Treasury yield, currently around 4.5%, might test the 4.75% mark.Impact on Stock Market and Currency
Ongoing government spending creates uncertainty in the stock market. Higher bond yields can make stocks less attractive and may negatively impact corporate profits by increasing borrowing costs. Investors might consider buying protection, like call options on the VIX, which has been around a low of 15. For currency traders, the immediate effect could be a stronger U.S. dollar, as higher yields draw in foreign investment. The Dollar Index (DXY) is currently holding steady above 105. This trend might continue, especially against currencies from countries where central banks might ease policies. Given this situation, we are looking at ways to benefit from rising yields, such as buying puts on Treasury bond futures. Additionally, it would be wise to hedge long equity exposure with S&P 500 put options until the market fully understands the implications of this spending. The lack of political concern about the deficit indicates that high government spending is likely to continue. Create your live VT Markets account and start trading now.US Consumer Price Index, excluding food and energy, rises to 3.1%, surpassing forecasts
In July, the United States Consumer Price Index (CPI), excluding food and energy, rose by 3.1% compared to last year. This increase was higher than the expected 3%.
The Bank of England has cut interest rates by 25 basis points to 4%. However, officials suggest this easing cycle may end soon due to inflation worries.
