In September, Canada’s Bank of Canada announced that the Consumer Price Index Core (MoM) rose to 0.2%, up from 0%. This change shows how consumer prices are moving and helps track inflation by leaving out fluctuating items like food and energy. Gold prices fell, hitting multi-day lows close to $4,120 per troy ounce. This drop was due to a stronger US Dollar and less excitement around the US-China trade situation. Similarly, Bitcoin, Ethereum, and XRP also decreased as global markets face ongoing economic challenges and geopolitical issues, worsened by the extended US government shutdown.

Shifts In The Economic Landscape

Although there’s some relief because the global economy has performed better than expected in light of US tariffs, there are troubling changes beneath the surface. These shifts could have long-lasting effects that are still unclear. Over the last five years, Bitcoin treasuries have dropped by 99%, and Bitcoin is now often viewed as a reserve asset. This trend is visible in both company financials and government holdings, indicating changes in how businesses own assets. Now that Canada’s core inflation has risen to 0.2% last month, we might see different approaches in central bank policies. The Bank of Canada could feel pressure to maintain its stance, while the US Federal Reserve is focused on the ongoing government shutdown. Traders should consider options on the USD/CAD pair to take advantage of any unexpected policy shifts in the coming weeks. Gold’s recent dip toward $4,100 seems to be linked to a stronger US Dollar, which has become a temporary safe haven during the shutdown. After reaching over $4,300 due to tensions in the South China Sea earlier this year, this pullback appears to be profit-taking. We suggest that buying put options on major gold ETFs offers a defined-risk way to benefit from a further drop toward the psychological $4,000 mark.

Anxious Relief In The Economy

There’s a mix of anxious relief as the global economy has managed shocks better than we thought it would back in spring. However, with the US government shutdown now in its fourth week and Q4 GDP predictions being lowered to below 0.5%, this sense of calm feels shaky. The VIX index has dropped to 19, making call options on volatility a cheap way to hedge against the significant changes mentioned. The crypto markets are in a risk-off mode, with Bitcoin and Ethereum both falling along with stocks. The decrease in institutional investments is a serious concern; data shows that inflows to corporate treasuries fell from over $2 billion a month in 2024 to just $20 million in September 2025. This signals that derivative traders should be careful, using futures to protect existing positions or buying puts to bet on dipping below key support levels. Create your live VT Markets account and start trading now.

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Marriott International Inc. (NASDAQ: MAR) is seeing a positive long-term trend according to Elliott Wave analysis. The monthly chart suggests that a major correction is over, leading to a new upward phase. Since the low in 2009, Marriott has created a five-wave pattern. Wave (I) peaked near the 2018 high. Then, between 2018 and 2020, the stock corrected, forming an a–b–c structure that concluded wave (II) at about $46.24. As long as Marriott stays above this level, the outlook remains bullish. After wave (II), Marriott entered a new positive phase. It completed wave I of a larger wave (III) with a strong five-wave rally, followed by a small correction for wave II. The stock now appears to be starting wave III, which is typically the strongest part of the Elliott Wave cycle. Analysts recommend trading with the main trend and avoiding selling against it. Instead, investors should look for pullbacks to find new buying opportunities. Marriott is benefiting from the recovery in global travel. Increased hotel demand and steady earnings growth strengthen its positive outlook. If the current pattern continues, wave III could reach new highs in the coming years. In summary, Marriott’s Elliott Wave structure remains bullish above $46.24, supporting long positions as the market continues on a positive path. The analysis indicates a strong upward trend for Marriott, suggesting we should focus on buying strategies in the upcoming weeks. The stock is in the early stages of a powerful wave III, which is typically the strongest part of a trend. Selling against this primary trend is not advisable. This technical perspective is backed by strong travel data released this quarter. For example, the Global Business Travel Association reported in September 2025 that corporate travel spending has fully recovered and even exceeded 2019 levels. Additionally, Marriott’s third-quarter earnings report last week showed a 12% year-over-year increase in revenue per available room (RevPAR). For those trading options, minor price dips should be seen as chances to create bullish positions. Buying call options that expire in January or February 2026 would give direct exposure to upside potential. Bull call spreads are another effective strategy to reduce initial costs, especially during times of high implied volatility. Consumer demand for travel has shown resilience despite inflation and interest rate hikes in 2023 and 2024, creating a strong foundation for growth. While the long-term invalidation level from the 2020 low is $46.24, recent support for immediate trades is around $265. As long as the price stays above this level, the most likely direction is upward.

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Freeport-McMoRan Inc. (FCX) is a key copper producer that appears to have finished a major correction, indicating the start of a positive trend according to Elliott Wave analysis. This is supported by rising global demand for copper and strong market momentum. In the past, FCX’s substantial climb began at a low of $3.38 in 2000, reaching its first peak in 2008. The financial crisis led to a sharp decline, creating a second wave. FCX then rebounded energetically, peaking around $61.34 in early 2022, ending a higher wave. The decrease from 2022 to 2025 followed a corrective pattern, reaching a low near $30 and completing the second wave. The recent rebound indicates the start of wave 3 of wave III, which is often the strongest phase of the Elliott Wave cycle. The positive outlook stays intact as long as FCX remains above $3.52, the low point of 2016 where the second wave ended. Long-term copper demand is driven by electrification and renewable energy projects. If momentum keeps up, wave 3 could go beyond the $60-$65 range in the coming years. Overall, FCX is set to gain from the growing copper market while staying above the $3.52 support level. This analysis suggests that FCX has finished its long correction and is now entering a powerful upward trend. The recent bounce back from the lows near $30 in early 2025 marks the beginning of a major rally. For traders focused on derivatives, this shift indicates a move toward bullish strategies in the coming weeks. With the potential for a strong upward movement, buying call options expiring in a few months, like December 2025 or January 2026, could provide leveraged exposure to this anticipated rise. This aligns with the idea that the strongest part of the Elliott Wave cycle has just begun. This bullish feeling is further supported by recent news from the International Energy Agency, which upgraded its five-year copper demand forecast last month, noting faster-than-expected grid modernization in North America and Asia. Additionally, we can examine historical patterns, like the strong recovery following the 2008 and 2016 lows, which led to significant long-term rallies. The current trend resembles those past setups, suggesting a similar outcome is likely. Recent data shows that copper inventories in LME warehouses have dropped to their lowest levels since 2023, adding a fundamental supply squeeze to the bullish outlook. For more cautious traders, selling cash-secured puts below the recent 2025 low of around $30 may be a suitable strategy. This allows for earning premiums while having a clear entry point if the stock retreats. The long-term invalidation point remains well below at $3.52, providing considerable room for the current bullish trend to grow.

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The Euro has fallen below 1.1630 as the US Dollar gains strength due to easing trade tensions. President Trump hinted at a potentially positive deal with China’s Xi Jinping. His encouraging remarks toward China have lifted the Dollar, with a meeting set to further address trade issues. The White House’s economic advisor believes the government shutdown will end soon, which could provide important data for the Federal Reserve’s decision on interest rates. This week, speeches from officials at the Fed and ECB will provide some context, but we shouldn’t expect major insights into monetary policy.

Currency Market Trends

In the currency market, the Euro has dropped 0.24% against the US Dollar and 0.58% against the Japanese Yen. Traders are focused on upcoming important meetings, especially the Federal Reserve’s, which could affect the Euro. In the Eurozone, the Euro is facing difficulties. Germany’s Producer Price Index has decreased slightly, which was unexpected. The EUR/USD has returned to a bearish trend, targeting the 1.1600 level, unless it breaks resistance at 1.1675. A weaker Euro reflects broader economic uncertainties tied to changing US-China trade relations. As the EUR/USD dips below 1.1630, the trend seems to be heading down for the coming weeks. The main factor is the renewed strength of the US Dollar, driven by optimism about a potential trade deal between the US and China next week. This positive outlook seems to overshadow expectations of a Federal Reserve rate cut, which markets now view as a temporary adjustment rather than the beginning of a longer-term easing cycle. This perspective is supported by differing economic data from the US and Eurozone. Recent reports showed US retail sales increased a surprising 0.8% in September, while the Eurozone continues to struggle with weak producer prices and low inflation. Recent ECB projections indicate core inflation may stay below 1.8% until the first half of 2026, which gives the ECB little reason to adopt a tougher stance.

Strategic Investment Decisions

Given the clear downward trend and specific targets around 1.1600 and 1.1545, we should think about buying EUR/USD put options. Purchasing puts with a strike price of 1.1600 or 1.1550 that expire in mid-November could allow us to profit if the Euro continues to fall after next week’s events. A bear put spread could also be a smart approach to minimize the initial cost of this position. Currently, market volatility is low as traders wait for the Fed meeting and the Trump-Xi discussions. This presents an opportunity, as the low implied volatility makes buying options cheaper than usual. We expect volatility to rise sharply next week, making this an ideal time to position ourselves for a significant price movement. We must also keep in mind the market behavior from 2017 to 2021 when trade-related news often caused sharp, unpredictable shifts in currency pairs. While the current trend is bearish for the Euro, a surprisingly positive trade deal could lead to a sharp relief rally. Therefore, using options to define risk is essential, as the situation could change quickly based on next week’s outcomes. Create your live VT Markets account and start trading now.

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Gold prices struggled at the $4,380 mark before falling over $100, influenced by positive market sentiment and a stronger US Dollar. President Trump’s meeting plans with Chinese President Xi, along with reassurance regarding Taiwan, helped calm the markets. From a technical perspective, a Double Top pattern around $4,380 suggests further declines may occur. Gold is now close to $4,260, with the neckline of the Double Top at $4,190 acting as a crucial point. A drop below this level could confirm a decline toward $4,095, and possibly down to the key $4,000 mark.

Gold As A Safe Haven Asset

Gold is known for its value retention and is considered a safe-haven asset in uncertain times. Central banks, particularly in emerging economies like China and India, bought a significant 1,136 tonnes of gold in 2022. Gold’s price usually rises when the US Dollar falls or interest rates are low. It is also affected by geopolitical tensions and fears of recession, with a stronger Dollar often leading to stabilization or declines in gold prices. Given the resistance at $4,380 and the recent price drop, we anticipate short-term weakness. Improved market sentiment due to reduced US-China tensions is boosting the US Dollar, diverting investments away from safe-haven assets. This means gold’s potential for price increases may be limited in the weeks ahead. The Dollar’s strength is backed by recent economic data. Last week’s US Consumer Price Index report indicated core inflation stubbornly sits at 3.1%. This suggests that the Federal Reserve may maintain higher interest rates for an extended period. Consequently, the S&P 500 has increased over 3% in the past week, showing a clear shift toward riskier assets.

Market Considerations For Traders

We are keeping a close eye on the important support level at $4,190, the low from October 17. If this neckline breaks, it would confirm the bearish Double Top pattern, indicating that the recent upward trend has ended. Technical signals, like the bearish divergence on the 4-hour RSI, support the possibility of further declines. For traders using derivatives, this situation presents an opportunity to consider bearish positions. A fall below $4,190 could lead to selling that targets the October 14 low of $4,095, with the ultimate aim being the psychological level of $4,000. Strategies could include purchasing put options or establishing short futures positions to take advantage of this expected movement. However, if prices do not break below $4,190, this could invalidate the immediate bearish outlook. We should be cautious, as a strong bounce from this level might test the significant resistance at the all-time high of $4,380 again. A rise above this peak would end the Double Top pattern and suggest a return to a longer-term bullish trend. Looking back, this price behavior is similar to what we observed in early 2024, when gold corrected after reaching new highs before finding support. While long-term buying by central banks, which broke records in 2022, continues to support prices, recent World Gold Council data for Q3 2025 showed a slight decrease in purchases. This may allow bears to take control in the near term. Create your live VT Markets account and start trading now.

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The Pound Sterling has recently fallen to about 1.3370 against the US Dollar, marking three consecutive days of decline. This drop comes as trade tensions between the US and China ease, making the US Dollar more appealing than the Pound. On Monday, the US Dollar Index, which gauges the dollar’s strength against six major currencies, rose by 0.25% to nearly 98.85. The UK’s inflation rate for September is expected to be 4%, matching the Bank of England’s forecasts and possibly affecting future economic decisions. The core UK Consumer Price Index (CPI) may rise slightly from 3.6% to 3.7%. Meanwhile, the US CPI is projected to stay steady at 3.1%. These inflation forecasts create pressure for both the UK and US central banks in their upcoming discussions.

Technical Analysis

From a technical view, the Pound Sterling is facing challenges against the US Dollar, hovering around 1.3370. It is below the 20-day Exponential Moving Average (EMA), and the Relative Strength Index indicates a sideways trend. The critical support level is at 1.3140, while resistance sits at 1.3500. The Pound continues to slide below 1.3400, propelled by a stronger US Dollar. This strength stems from optimism about a US-China trade agreement, reminiscent of the dynamics during the 2018-2019 trade tensions. Traders may consider buying puts on GBP/USD to prepare for a potential drop toward the 1.3300 level discussed in the technical analysis. Key events this week include inflation reports from the UK on Wednesday and from the US on Friday. While the UK’s headline CPI is expected to rise to 4%, it does not seem to be supporting the Pound, as concerns about a cooling job market weigh heavily. The US CPI is also predicted to climb to 3.1%, yet the market anticipates rate cuts from the Federal Reserve.

Market Volatility

We should recall the severe volatility the Pound experienced a few years ago, particularly during the 2022 “mini-budget” crisis, which caused GBP/USD to drop over 10% in just one month. Current data from the CME FedWatch tool indicates nearly a 75% chance of at least one Fed rate cut by December, suggesting that the market is focusing more on growth concerns than on inflation. This difference in central bank expectations highlights the significance of the US Dollar’s current strength. In addition to the Pound, the Dollar is notably strong against the Japanese Yen, as shown in the currency heatmap. Easing geopolitical tensions are putting pressure on the safe-haven Yen, a trend that tends to increase during optimistic market sentiments. This makes long USD/JPY positions an appealing choice for those bullish on the Dollar. Create your live VT Markets account and start trading now.

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The AUD/USD pair has fallen over 0.5% to around 0.6480 during the European trading session on Tuesday. This drop comes even after a new trade agreement on critical minerals between the US and Australia, which aims to lessen US reliance on China. Currently, trade tensions persist between the US and China, highlighted by China’s export controls on rare earths. In response, the US has raised tariffs on imports from China by 100%, although there are indications that these tensions may be showing signs of easing.

The Impact Of The US Dollar

The US Dollar is on the rise, with the Dollar Index nearing 99.00. This happens even though the Federal Reserve is expected to lower interest rates soon. The FedWatch tool suggests that a 25 basis point cut is almost guaranteed, bringing rates down to between 3.75% and 4.00%. The Australian Dollar is heavily influenced by the Chinese economy, as China is its largest trading partner. Additionally, the price of iron ore, Australia’s top export, significantly affects the AUD’s value. Typically, higher iron ore prices boost the Australian currency. Currently, the AUD/USD pair faces strong pressure, trading around 0.6480 despite the new minerals agreement with the US. This positive local news is being overshadowed by the robustness of the US dollar, as the DXY index approaches the 99.00 mark. The market appears to be prioritizing broader economic trends over smaller trade agreements. Traders should pay attention to the differing paths of the central banks. The Reserve Bank of Australia kept its cash rate steady at 4.35% earlier this month because of persistent inflation. In contrast, almost everyone in the market expects a 25 basis point cut from the US Federal Reserve next week. This widening difference in interest rates favors the Australian dollar but is currently being overlooked, indicating a strong bearish mood.

Factors Affecting The Australian Dollar

The Australian dollar is also facing challenges from its main trading partner and key exports. Recent data showed that China’s Q3 GDP growth was only 4.8%, falling short of expectations. As a result, the price of iron ore has dipped below $110 per tonne, providing little support for the Australian dollar. All attention will be on the delayed US Consumer Price Index (CPI) report set for release this Friday. August’s inflation figure was a stubborn 3.5%, so another high number could complicate the Fed’s rate-cut decision and boost the US dollar further. A lower-than-expected CPI would be crucial for the AUD/USD to have any chance of a short-term recovery. Given this situation, traders might want to prepare for further downside in the AUD/USD pair. Buying put options could provide a defined-risk opportunity to profit from a continued decline, especially if Friday’s US inflation numbers are high. Alternatively, selling out-of-the-money call options or setting up bear call spreads may be wise strategies to take advantage of what seems to be a very limited upside. Create your live VT Markets account and start trading now.

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The Japanese Yen is facing challenges as Prime Minister Sanae Takaichi introduces her new cabinet. The market is reacting to the appointment of Satsuki Katayama as Finance Minister, with the USD/JPY rising to 151.90, a 0.80% increase today. Katayama has raised concerns about the weak Japanese Yen. She believes a fair exchange rate should be between 120 and 130 JPY per USD. However, Takaichi’s coalition does not have a parliamentary majority, creating uncertainty around economic reforms.

US Dollar And Global Market Dynamics

The US Dollar is gaining strength due to improving market sentiment and easing tensions in US-China trade. According to the CME FedWatch tool, traders expect a 25-basis-point interest rate cut in the upcoming Federal Reserve meetings in October and December. In terms of currency performance, the Japanese Yen is doing best against the New Zealand Dollar. The heat map details percentage changes among major currencies, showing how they perform against one another. Additional content discusses the wider economic context, including US-China trade dynamics and Federal Reserve outlooks. It also covers market insights related to crude oil supply issues and how currencies affect commodity prices. As USD/JPY nears the 152.00 mark, it raises alarms. The Ministry of Finance intervened in the currency markets in late 2022 when the pair reached this level. The new Finance Minister’s preference for a stronger yen means the risk of government action is higher than it has been in years.

Inflation and Monetary Policy

Recent data shows Japan’s core inflation held steady at 2.1% for September. This gives the Bank of Japan (BoJ) room to move away from its ultra-loose policy. Although the BoJ maintained its current policy last week, its statements indicated growing concern about yen weakness. This hints that any effort to bolster the yen would have some support from the central bank, heightening the risk of intervention. In the US, the strength of the dollar looks fragile despite positive market sentiment. Last week’s retail sales data was weaker than expected, and the CME FedWatch Tool shows a 94% chance of a 25-basis-point rate cut at the Federal Reserve’s meeting next week. This dovish outlook may limit any long-term dollar increases. For derivative traders, buying short-dated USD/JPY put options could be an effective way to hedge against or profit from a sudden reversal due to intervention. CFTC data reveals that speculative short positions against the yen are at their highest since 2017, making the currency susceptible to a rapid short squeeze. Selling out-of-the-money call options above 152.50 might also be a good strategy to earn premium, betting that this level will hold as resistance. Create your live VT Markets account and start trading now.

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The New Zealand Dollar (NZD) is dropping against the stronger US Dollar and is approaching a support level of 0.5700. The US Dollar is gaining strength due to reduced concerns about a trade war between the US and China. If the NZD falls below 0.5700, it will confirm a bearish flag pattern for the NZD/USD pair. This week, the NZD couldn’t break through the resistance level of 0.5750-0.5760, leading to more downward pressure. The US Dollar’s recovery is supported by positive expectations for a US-China trade deal. In New Zealand, strong CPI figures haven’t changed the negative sentiment due to inflation and slow growth challenges.

Key Resistance Analysis

The 0.5750 level is a key resistance point, stopping any upward movement. If the NZD drops below 0.5700, it will trigger a Bearish Flag, aiming for 0.5680, with a target at the 0.5640 Fibonacci extension. Any attempts to rise will likely hit resistance at 0.5750-0.5760, with more resistance around 0.5805. The US Dollar has shown strength against the Japanese Yen, rising by 0.22% against the Euro, 0.18% against the Pound, and 0.81% against the Yen. In contrast, the NZD fell by 0.48% against the USD, highlighting its ongoing decline amid the current market trends. Looking back at past analysis, the Kiwi was testing the 0.5700 level. Now, on October 21, 2025, the NZD/USD is trading healthier at 0.6150, showing how market dynamics have changed. Old fears about a US-China trade war are now overshadowed by the differing policies of central banks.

Shifting Market Dynamics

Fundamental drivers have shifted completely. Previously, a strong dollar was the focus, but now the interest rates favor the Kiwi, with New Zealand’s official cash rate at 5.25%, compared to the US Fed Funds rate of 4.75%. This interest rate advantage gives the NZD a stronger support level that wasn’t present before. Recent economic data backs up this new situation. In Q3 2025, New Zealand’s inflation was 3.1%, continuing to decrease from the highs seen in 2023. Meanwhile, GDP shows modest growth of 0.5% per quarter. This contrasts with previous concerns about stagflation, indicating that the Reserve Bank of New Zealand (RBNZ) is managing the economy well. For derivative traders, this shifts the strategy from a past bearish outlook. Instead of betting on further declines, selling out-of-the-money put options with a strike price around 0.6000 could be a good strategy. This allows for collecting premiums by betting that the supportive interest rate will keep the NZD from dropping below that psychological level in the upcoming weeks. The current stability has led to lower implied volatility compared to the trade-war period, making long option strategies more budget-friendly. Traders expecting a climb might consider purchasing call options with a 0.6250 strike price that expires in December. This can be a cost-effective way to prepare for potential gains as we approach the final central bank meetings of the year. Create your live VT Markets account and start trading now.

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A recent poll by Reuters shows that 115 out of 117 economists expect the Federal Reserve to cut interest rates by 25 basis points, bringing them to a range of 3.75%-4.00% on October 29. For the year, 83 economists think there will be two more rate cuts, while 32 believe there will be just one more. However, 25 out of 33 economists worry that the risk is setting rates too low as the cycle ends. Despite this speculation about rate cuts, the US Dollar Index—which measures the dollar against six major currencies—has actually increased by 0.35%, approaching 98.95.

Monetary Policy Implications

The Federal Reserve manages US monetary policy to achieve price stability and full employment by changing interest rates. Higher rates strengthen the US Dollar, drawing in foreign investment, while lower rates encourage borrowing. The Fed meets eight times a year, with the Federal Open Market Committee making decisions on monetary policy. Quantitative Easing boosts credit availability by purchasing bonds, which can weaken the US Dollar. On the other hand, Quantitative Tightening—when the Fed stops buying bonds—usually benefits the dollar’s value. With a cut in interest rates almost certain for October 29, the market has already factored this into prices. People are looking ahead to what the Federal Reserve will indicate for their December meeting and into 2026. As a result, the actual rate cut may not significantly impact directional trading. Interestingly, the US Dollar Index is gaining strength despite the expected cut. This suggests that traders are focusing on relative economic strength. New data indicates that the Eurozone is facing a possible recession, especially after weak factory orders in Germany, while the US economy appears more robust. The dollar isn’t trading in isolation; it is being bought because other major economies may need to ease their policies even more aggressively.

Currency Market Dynamics

Our economic data presents a mixed view that contributes to this uncertainty. Third-quarter GDP growth was only 1.5%, which supports the Fed’s actions, but the recent September CPI report shows inflation stubbornly holding at 3.4%. This means the Fed has limited room for significant cuts, helping to keep the dollar strong for now. For traders dealing in derivatives, this situation suggests that focusing on market volatility might be more beneficial than simply betting on the dollar’s direction. As the major price movement will likely come from the Fed’s statements rather than the rate cut itself, options strategies that benefit from significant swings in either direction could be valuable. For instance, buying a straddle on the EUR/USD during the announcement could capitalize on the market’s response to any unexpected guidance. We’ve seen similar trends in the past, like in 2019, when the dollar gained strength even as the Fed lowered rates because it was viewed as the “least dovish” central bank. The biggest risk to the dollar’s current strength arises if the Fed’s statement hints at more than the expected two rate cuts this year, making long-dated put options on the dollar a sensible hedge against any sudden policy changes. Create your live VT Markets account and start trading now.

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