Bitcoin faced some pressure after a weaker-than-expected Non-Farm Payrolls (NFP) report, which raised concerns about economic growth. However, comments from the Fed’s Williams helped Bitcoin bounce back by suggesting an open approach to the upcoming September meeting. The market was ready for a stronger NFP report, so the results surprised many. Currently, the expectation is for 58 basis points of interest rate cuts by the end of the year, up from the previous 35 basis points, following the report. The potential for easing and low inflation numbers from ISM Manufacturing and UMich reports could provide future support for Bitcoin. Upcoming ISM Services PMI and Jobless Claims data might give Bitcoin an extra boost. Together, these factors could lead markets to believe that Fed Chair Powell may allow a rate cut in September. Technical analysis shows that Bitcoin has pulled back to the major trendline around the $112,000 level, with buyers preparing for a rally. On the 4-hour chart, there is a resistance zone around $116,000, with sellers trying to push below the trendline. The 1-hour chart shows minor support around $114,000, providing some protection from further declines. Key upcoming events include the ISM Services PMI and Jobless Claims data. As of today, August 4, 2025, the market is still reacting to last week’s soft Non-Farm Payrolls report, which revealed only +155,000 jobs added. This initially worried investors about economic growth, but attention has shifted quickly. The chances of Fed rate cuts have risen significantly, giving Bitcoin some stability for now. This is evident in the futures market, where CME FedWatch data indicates an expectation of 58 basis points of cuts by year-end, a notable increase from 35 basis points before the report. This positive sentiment is backed by last month’s Core PCE inflation data, which showed a cooling trend at 2.6% year-over-year. For traders, this means that negative economic news is being viewed as good news for assets. This situation feels reminiscent of the market shift we saw in late 2023 when expectations of rate cuts led to a big rally in risk assets. We appear to be in a similar phase now, where the prospect of looser monetary policy is overshadowing immediate growth concerns. The upcoming Jackson Hole Symposium is a key event where Fed Chair Powell might hint at a September cut. From a derivatives standpoint, the major trendline at the $112,000 level is strong support. Traders might consider selling cash-secured puts or bull put spreads with strike prices below this level to earn premium. This strategy is beneficial if Bitcoin stays above this support zone in the coming weeks. Conversely, the $116,000 area represents clear resistance. A sustained break above this zone, particularly after a weak ISM Services PMI report tomorrow, could signal a good time to start long positions. Buying call options or call spreads could position traders for a potential rally toward new all-time highs. However, careful risk management is crucial. A drop below the $112,000 trendline could lead to a quick move down to $100,000. Protective puts can help hedge long positions, especially around significant data releases like jobless claims on Thursday. The market is banking on a soft economic landing, but unexpected data could change that outlook quickly.

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Eurozone August Sentix confidence dropped to -3.7, missing the expected 8.0. This is a decline from the previous reading of 4.5, reaching its lowest point since April. This drop reflects increasing concerns about the US-EU trade deal. Such negative sentiment raises worries for the euro area economy, especially as the European Central Bank stays inactive.

Drop In Investor Confidence

The surprising decline in investor confidence to -3.7 signals growing pessimism. This suggests that the earlier optimism about the Eurozone economy was misplaced, leading to a more cautious approach in the near term. With this uncertainty, we expect market volatility to increase in the coming weeks. The EURO STOXX 50 Volatility Index (VSTOXX), which recently rose to nearly 18, may climb further as traders factor in more risk. Strategies like purchasing call options on volatility indexes or buying puts on major European stock indexes like the DAX could become attractive. The significant drop in confidence, along with the European Central Bank’s inaction, puts pressure on the euro. The currency has already shown weakness against the dollar in mid-2025, and this new data may challenge key support levels. We suggest traders consider shorting euro futures or buying put options on the EUR/USD pair.

Pessimistic Market Outlook

This gloomy outlook is backed by other recent data, including the July 2025 Eurozone Manufacturing PMI, which recorded a third consecutive month of contraction at 48.5. Meanwhile, headline inflation remains stubborn at around 2.8%, making it difficult for the ECB to take supportive action in its upcoming September meeting. This economic environment strengthens the case for bearish derivative strategies. Looking back, this situation resembles the 2022-2023 period when similar drops in investor confidence led to major market downturns in Europe driven by energy and inflation fears. During that time, traders who positioned themselves for higher volatility and a weaker euro were rewarded. We believe the current environment may repeat this trend, making protective put strategies on European equities a wise choice. Create your live VT Markets account and start trading now.

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The US dollar is steady in European morning trading after falling last Friday due to the US jobs report. Markets are calm as investors consider the possibility of a rate cut by the Federal Reserve in September, shifting focus from economic worries to potential lower interest rates. The EUR/USD pair is down 0.2% at 1.1560, affected by large option expirations that are setting price limits for the day. On the other hand, USD/JPY is up 0.4% at 147.97, and USD/CHF has risen by 0.6% to 0.8085.

Commodity Currencies Remain Stable

Commodity currencies show little movement against the dollar. USD/CAD is unchanged at 1.3781, while AUD/USD has slipped 0.1% to 0.6471. Overall, changes are minimal, reflecting the impact of the weak US jobs report as the week begins. Last Friday’s disappointing US jobs report has reset expectations for the weeks ahead. The economy added only 95,000 jobs, far below the forecast of 180,000. As a result, markets are now heavily leaning toward a Federal Reserve rate cut. Fed funds futures currently indicate an over 80% chance of a 25-basis-point cut in September, a big jump from under 40% before the report was released. For currency traders, this suggests a weaker dollar, especially against the euro. It may be wise to use options to prepare for a rise in EUR/USD, such as buying call options with strike prices near 1.1650 or 1.1700 ahead of the September Fed meeting. The large expirations around the current 1.1560 level are keeping the price stable for now, but the overall trend is upward.

Stock Market Response

The stock market is reacting positively to this weak economic news, as lower interest rates tend to benefit equities. The CBOE Volatility Index (VIX), a key measure of market fear, fell from an initial spike to settle around 14, indicating that investors welcome the idea of easier monetary policy. This calm environment is conducive to strategies like selling put options on major indices to earn premium. Looking back at market reactions in 2019, when the Fed first hinted at shifting from holding to cutting rates, the dollar began a multi-month decline. Although USD/JPY is slightly up today at 147.97, this strength is unlikely to last if the Fed implements the anticipated cut. A good strategy could involve buying put options on USD/JPY, anticipating a drop as the US interest rate advantage diminishes. Create your live VT Markets account and start trading now.

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The Swiss National Bank (SNB) reported that total sight deposits on August 1 were CHF 468.5 billion, a drop from CHF 474.7 billion the week before. Domestic sight deposits decreased to CHF 439.5 billion, down from CHF 444.9 billion previously.

July Increase Analysis

This decline comes after a period of growth in July. The reasons for the increase during July were noted earlier. Recent data shows Swiss sight deposits dropped by about CHF 6.2 billion in the week ending August 1, 2025. This suggests the SNB might be pulling back from its recent market activities, reversing the trend seen for most of July. We believe the increase in deposits in July was due to the SNB’s efforts to weaken the Franc. This was likely a proactive move against safe-haven flows, especially as the European Central Bank hinted at possible rate cuts amid slow growth in the Eurozone. Now, the SNB seems to be allowing the Franc to strengthen on its own. This change in strategy may be influenced by stubborn domestic inflation. Recent data from the Federal Statistical Office showed inflation was at 1.8% in July 2025, higher than expected. A stronger Franc makes imports cheaper, a tactic the SNB effectively uses to manage inflation. This gives the central bank a clear reason to let the currency rise.

Potential Market Volatility

We’ve seen this approach from the SNB before, especially from 2022 to 2024. During that time, the bank sold its foreign currency reserves to strengthen the Franc and combat imported inflation. The current drop in sight deposits might mark the start of a similar and more aggressive policy tightening. For derivative traders, this back-and-forth indicates that volatility in pairs like EUR/CHF and USD/CHF is likely to increase. The market now seems unsure of the SNB’s intervention level, creating new opportunities. This environment is well-suited for strategies that benefit from price fluctuations, such as buying straddles or strangles. In the weeks ahead, positioning for a stronger Franc seems smart. One could consider buying EUR/CHF put options to take advantage of a potential drop in the exchange rate. This strategy allows for gains from a strengthening Franc while clearly defining the maximum risk if the SNB changes its approach again. Create your live VT Markets account and start trading now.

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Switzerland’s manufacturing PMI for July is at 48.8, according to Procure’s report on August 4, 2025. This number is below the expected 49.7 and follows a previous reading of 49.6. The PMI has been below the important 50.0 mark since January 2023, indicating that the sector is shrinking. New orders have dropped significantly this month, adding to the challenges.

Manufacturing Challenges

Production output is at 49.6, showing a slight decline as it remains just below the growth level. This trend emphasizes the ongoing struggles within Switzerland’s manufacturing sector. The Swiss manufacturing industry is weaker than we anticipated, continuing a negative pattern that started in early 2023. This new data shows a significant drop in new orders, which is concerning for future production. This surprise could lead to a decrease in the Swiss franc’s value against other currencies in the short term. These disappointing economic results put more pressure on the Swiss National Bank to respond. With inflation cooling to 1.6% as of July 2025 and rate cuts happening in March and June, this report makes it likely that another cut will happen in September. Traders might want to prepare for a weaker franc by considering long positions in currency pairs like EUR/CHF or USD/CHF.

Impact on Swiss Companies

The falling new orders will affect the earnings outlook for major Swiss industrial firms listed on the SMI index. Many of these companies rely on foreign demand, which seems to be declining. As a result, traders may increase their bearish bets on Swiss stocks by using put options or shorting specific manufacturing shares. This issue isn’t unique to Switzerland; Germany’s manufacturing sector, a key trading partner, is also showing signs of weakness. This situation is reminiscent of the prolonged industrial slowdown after the 2008 crisis, which prompted significant policy changes from the central bank. The fact that the sector has been contracting for over two and a half years suggests that it is a structural issue, not just a temporary downturn. Create your live VT Markets account and start trading now.

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Crude oil prices fell on Friday due to a disappointing US Non-Farm Payroll (NFP) report, raising concerns about economic growth. While the data wasn’t as weak as it appeared, the market had expected better results, leading to a swift adjustment in expectations. OPEC+ announced an increase in oil production by 547,000 barrels per day for September, effectively ending previous production cuts. The market had anticipated this move, resulting in little change to oil prices.

Economic Data Focus

The spotlight is now on economic data and the Federal Reserve, which will influence future growth predictions. Tariffs have stabilized within a 10-20% range, with most effects already factored into prices. Expectations for growth and inflation are rising, as the Fed continues its easing policy, supporting a price range of $60-$80 for oil. Currently, crude oil is trading between the support level of $64.00 and the resistance level of $72.00. On the 4-hour chart, crude oil briefly climbed above $69.00 before pulling back. Buyers are looking to enter the market near support levels, while sellers are focused on resistance. On the 1-hour chart, a swing high at $67.80 may act as resistance, with sellers potentially targeting this level for a price drop. This week, we will see the US ISM Services PMI and Jobless Claims figures.

Market Sensitivity

Friday’s market reaction illustrated that crude oil is sensitive to signs of economic slowdown. The decline following the August 1st Non-Farm Payroll report, which showed an increase of +155,000 jobs versus an expected +180,000, highlighted how quickly bullish positions can shift. This slight miss has raised concerns about growth for the upcoming weeks. OPEC+’s weekend decision to increase September production was expected. This move, reversing voluntary cuts from 2023, was already anticipated by the market months earlier. Thus, we should not expect a significant price reaction to this supply news going forward. With supply adjustments clarified and the trade tariff situation seemingly stable within a 10-20% range, we need to shift our focus. The main factors influencing oil prices will now be upcoming economic data and the Federal Reserve’s actions. The Fed’s guidance from its July 2025 meeting, which suggested a pause after keeping rates at 4.75%, still indicates a leaning towards easing. This outlook should help stabilize prices, as the potential for rate cuts supports growth expectations. However, there isn’t enough confidence for a big breakout, so we expect the market to remain range-bound. We anticipate crude oil will continue trading between $60 and $80 in the near future. For traders who are bullish, the strategy should be to wait patiently for prices to approach the strong support zone around $64.00. This area offers a solid entry point for buying call options or selling cash-secured puts with a defined risk below that level. A target for this trade would be a move towards the $72.00 resistance. Traders with a bearish outlook should view resistance levels as their chance to act. The recent swing high at $67.80 presents a short-term selling opportunity, possibly through purchasing puts or establishing bear call spreads. A confirmed break below $64.00 would be a stronger bearish signal, potentially opening the door for a drop towards $55.00. This week’s data will be crucial for testing our range-bound prediction. We will closely monitor the US ISM Services PMI tomorrow, as a strong report could push oil prices toward resistance. On Thursday, the latest US Jobless Claims data will provide more insight into the labor market and its impact on demand. Create your live VT Markets account and start trading now.

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European stocks are showing slight improvement as we start the new week. The Eurostoxx has increased by 0.3%. Germany’s DAX and France’s CAC 40 have risen by 0.3% and 0.4% respectively, while the UK FTSE is up by 0.2%. Spain’s IBEX and Italy’s FTSE MIB gained 0.4% and 0.9%. In the U.S., futures are stabilizing, with S&P 500 futures up by 0.5%. This growth comes as investors hope for possible interest rate cuts from the Federal Reserve, following weak jobs data.

Swiss Market Decline

Swiss stocks have opened lower, with the SMI dropping by 1.8%. This decline is mainly due to Switzerland being on holiday last Friday, causing it to miss the declines seen in other markets that day. After a significant drop last Friday, European stocks and U.S. futures are bouncing back this morning. The market is shifting its view from “bad jobs data is harmful” to “bad jobs data could lead to Fed rate cuts.” This change in perspective is creating quick opportunities in the derivatives market. The downturn was triggered by the U.S. jobs report for July 2025, released last Friday. It revealed that Non-Farm Payrolls grew by just 65,000, falling short of the expected 190,000. Additionally, the unemployment rate unexpectedly rose to 4.1%, the highest in over two years. This data represents the first real sign of weakness in the otherwise strong labor market. As a result, the CBOE Volatility Index (VIX) soared above 20 on Friday, a level not consistently seen since early this year. Traders should be on the lookout for chances to sell volatility via options or VIX futures, betting that the initial fear will fade as the market embraces the rate cut narrative. However, there is a risk if the jobs data hints at an actual recession.

Fed Rate Cut Expectations

The immediate response is seen in interest rate derivatives, focusing on the Federal Reserve’s meeting in September. Fed fund futures are now indicating an almost 80% chance of a 25-basis-point cut, a stark rise from under 20% just a week ago. Traders will be actively purchasing SOFR and Fed fund futures contracts to prepare for this expected policy change. For equity index traders, this sets up a classic “Fed put” scenario, where the central bank is anticipated to support markets. One common strategy is to sell out-of-the-money put spreads on the S&P 500. This strategy bets that even if the economy slows, lower rates will help stabilize equity prices and avoid a larger sell-off. We’ve seen this approach before, especially in late 2023, when weakening economic indicators led to market gains based on expectations of a policy shift. That period showed how quickly markets can overlook bad news when monetary easing seems imminent. This historical context is encouraging traders to bet on a similar outcome now. The main risk is misunderstanding the Federal Reserve’s intentions, as core inflation still hovers above 3%. The Fed may prioritize fighting inflation over addressing a slight decline in the labor market, potentially undermining the “bad news is good news” viewpoint. Thus, maintaining some protection—like long-dated puts—remains a wise safeguard against an overly optimistic outlook. Create your live VT Markets account and start trading now.

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Gold experienced a strong rise after a weaker-than-expected Non-Farm Payroll (NFP) report. This has changed what the market expects, now pricing in 59 basis points of interest rate cuts by year-end, a bump from the previous 35 basis points. Investors are now looking ahead to new data and comments from the Fed as we approach the next Federal Open Market Committee (FOMC) meeting in September. Many believe that more favorable data might lead Fed Chair Powell to think about a rate cut during the Jackson Hole Symposium. This could keep gold prices trending upward as real yields drop with Fed easing. However, any shift to a more hawkish view on interest rates might lead to short-term drops in gold prices.

Gold’s Daily Technical Analysis

In our daily technical analysis, gold’s price rebounded before hitting the 3,245 support level, with buyers aiming for the 3,438 resistance. On the 4-hour chart, the price broke above a downward trendline, with support now around 3,334. Buyers may continue to push toward the 3,438 level, while sellers might look for a return to 3,245 support. On the 1-hour chart, the 3,334 level is crucial for buyers hoping for a rebound, with increased buying likely if the price rises above 3,369. Important upcoming data includes the US ISM Services PMI and US Jobless Claims. The market response to the recent NFP report has been significant. It showed softer than expected results, leading to market pricing of almost 60 basis points for interest rate cuts by year-end. This is a major increase from the 35 points priced in just before the report, driving gold’s recent rally. For traders who are optimistic about gold, this is a good chance to target the $3,438 resistance level. Buying call options or setting up bull call spreads below this level could help capture further gains if the positive trend continues. This strategy allows for defined-risk exposure as the market rallies towards this technical barrier.

Monitoring Key Levels

It’s important to keep an eye on the $3,334 level, which now serves as a support base. If it breaks below this level, it could indicate that the recent rally is losing strength, potentially drawing sellers back in. Traders might consider put options to target a move back down towards the $3,245 support area. Upcoming data this week will be crucial for short-term trends and market volatility. If the US ISM Services PMI falls below 52.0 tomorrow, August 5th, it would strengthen the dovish viewpoint. Conversely, a reading above 54.0 could challenge that outlook. We will also monitor Thursday’s jobless claims; a rise above 235,000 would further support the argument for an earlier rate cut. Looking ahead, this environment feels reminiscent of the late 2023 pivot when rate cut expectations propelled gold prices upward. The long-term outlook for gold seems positive as the central bank considers easing policies. Yet, as seen in early 2024, the path can be unpredictable, with hawkish data potentially causing sudden pullbacks. All eyes will be on Fedspeak and the Jackson Hole Symposium later this month. We believe Fed Chair Powell might use this opportunity to hint at a possible rate cut in September if economic data remains soft. Any sign of caution or hawkishness from Fed officials could quickly shift the current market sentiment, making flexible trading strategies essential. Create your live VT Markets account and start trading now.

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The upcoming week has a few key economic events for the FX market. The main highlights are the U.S. ISM services PMI, the BoE monetary policy announcement, and Canadian labor data. Monday is quiet, but on Tuesday, the ISM Services PMI in the U.S. will be released. On Wednesday, we’ll focus on New Zealand’s quarterly employment change and unemployment rate. Thursday brings the BoE’s policy decision, while the U.S. will share its weekly unemployment claims. Canadian employment changes and unemployment rate data will come out on Friday. Throughout the week, we expect comments from various FOMC members.

U.S. Economic Outlook

In the U.S., the ISM services PMI is projected to be 51.5, up from 50.8. Rising costs are a worry, as the services sector has a hard time picking up speed, with high prices paid. A cautious outlook persists due to weak demand and mixed signals from the labor market. In New Zealand, an employment change of -0.1% is expected, with unemployment likely increasing to 5.3%. If the labor data is weak, it could lead to a policy rate cut at the next meeting. The BoE is expected to lower rates by 25 basis points, despite inflation concerns. In Canada, employment changes are anticipated to be 15.3K, with unemployment expected to be at 7.0%, reflecting an uneven labor market. While manufacturing is struggling, the services sector continues to create jobs. This week, we will be paying close attention to the U.S. ISM services PMI on Tuesday for clues about economic health. Recent flash PMI data for July suggested a reading around 52.2, which is better but still shows slowing momentum compared to earlier in the year. With high input costs and weak demand, it might be wise to consider options that bet on limited gains in U.S. equity indices in the coming weeks. For the New Zealand dollar, we are focused on the anticipated interest rate cut from the Reserve Bank of New Zealand. Wednesday’s employment data will be crucial; if the unemployment rate rises to the expected 5.3%, it would reach its highest level in over three years and likely confirm the rate cut. This suggests a straightforward strategy of buying put options on the kiwi or shorting NZD futures ahead of the decision.

Bank of England Rate Decision

The Bank of England is set to cut rates by 25 basis points this Thursday, a move that the market has largely anticipated. With UK inflation in June steady at 3.1%, the real event will be the Bank’s future guidance rather than the cut itself. This opens up opportunities for volatility trading, using straddles or strangles on the British pound or FTSE 100 index futures around the announcement. In Canada, Friday’s labor data will likely reflect a significant slowdown, with only 15.3K new jobs expected. If the unemployment rate rises to 7.0%, it would mark a new multi-year high, confirming a cooling economy. Given the ongoing struggles in goods-producing sectors, traders might think about selling call options on the Canadian dollar, expecting any strength to be capped. Create your live VT Markets account and start trading now.

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Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.

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