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CFTC’s net positions for the Eurozone drop to €123.4K from €125.5K
Eurozone’s CFTC EUR net short positions decreased from €125.5K to €123.4K. This reflects changes in euro trading positions.
EUR/USD rallied, trading above 1.1550 after disappointing US employment figures. The US Dollar weakened due to weaker Nonfarm Payrolls and ISM Manufacturing PMI data.
Dow Jones Industrial Average drops over 800 points after disappointing jobs report
The Dow Jones Industrial Average (DJIA) dropped nearly 2% on Friday, falling more than 800 points at its lowest point. The market struggled to recover after a disappointing Nonfarm Payrolls (NFP) report showed fewer jobs were added in July than expected.
The Dow hit a five-week low of 43,330 and encountered resistance around the 50-day Exponential Moving Average. Overall, the index suffered its worst week since April, falling over 3% from Monday’s opening near 45,000.
US Nonfarm Payrolls Report
In July, US Nonfarm Payrolls added just 73,000 jobs, far below the expected 110,000. The job additions for May and June were revised down, removing over 250,000 jobs from earlier numbers, leaving a three-month total of just 104,000 new jobs. With this disappointing labor data, the market now sees a strong chance of a Federal Reserve rate cut in September. According to the CME’s FedWatch Tool, the likelihood of at least a quarter-point cut has jumped to over 80% following the report, up from 45% before. US economic indicators show ongoing challenges, with the ISM Manufacturing PMI dropping to 48.0. In July, 79% of the manufacturing sector’s GDP saw contraction, a significant increase from June’s 46%, partly due to uncertainties about tariffs and delays in President Trump’s import tax plans.Market Volatility And Strategies
After Friday’s significant drop, market volatility has increased. The CBOE Volatility Index (VIX) jumped over 18%, closing above 19. Traders may want to consider strategies that benefit from price swings, such as long straddles on major indices. This environment suggests uncertainty will be a major theme in the market for now. Market reactions have shifted expectations firmly toward a rate cut in September. With the probability now exceeding 80%, downside risks could potentially be softened by the likelihood of cheaper money. This makes call options on interest-rate-sensitive sectors with late September expirations more appealing. The decline in the ISM Manufacturing PMI to 48.0 confirms a wider economic slowdown, highlighting the need for Fed intervention. We see yields on the 2-year Treasury note plummet to 3.85% as traders adjust for the anticipated rate cut. This bond market response reinforces our belief that, once the initial shock passes, equities could trend upward. We’re looking at this situation with the perspective of past events, like the Fed’s policy change in 2019. Back then, early market weakness led to a strong rally after rate cuts began, as monetary easing supported asset prices. While history isn’t a perfect predictor, it suggests we should be ready for a possible rally leading up to the September Fed meeting. Create your live VT Markets account and start trading now.WTI crude oil dips below $70 as geopolitical tensions increase, testing key support levels
WTI Crude Oil fell over 3% on Friday but still rose by 2.25% this week. Prices are approaching $66.70 after dropping from nearly $70 earlier in the week.
Geopolitical tensions have increased following US President Donald Trump’s announcement of nuclear submarines being positioned near Russia. This has raised energy security concerns. Trump’s messages on Truth Social added to the market volatility, especially since he also warned of tariffs on countries still buying Russian oil.
From a technical perspective, WTI is currently forming a symmetrical triangle, with prices moving towards the lower edge. If the current support fails, we could see a bearish breakout down to the $63.00-$60.00 range.
The support zone is strengthened by the 50-day and 100-day EMAs, which are around $66.08 and $66.12. If buyers can defend this area, we might see prices bounce back towards $70 or even the June high of $76.74.
The Relative Strength Index (RSI) is slightly above neutral at 50.30, while the MACD indicator shows diminishing bullish momentum. This indicates that there is no clear market direction, which reflects the overall uncertainties.
As of August 2, 2025, the oil market is experiencing a tug-of-war. The geopolitical tension from the White House’s remarks on Russia is pushing prices upwards. However, China’s July manufacturing PMI data was a bit disappointing at 50.2, signaling slower factory activity and raising concerns about demand.
Given the current situation, it’s wise to be cautious in the coming weeks. If prices drop below the critical support around $66, it could quickly fall to the $60-$63 range. This level is important as WTI consolidated in a similar area back in late 2023 before making its next major move.
The market seems doubtful that President Trump’s tariff threats will significantly reduce Russian oil supply in the short term. In 2022, price caps were avoided, and recent shipping data shows that Russian oil exports to Asia remained strong in July 2025, averaging over 3.4 million barrels per day. Along with OPEC+ maintaining its production cuts since June 2025, this creates a very tense supply situation.
For those considering a rebound, buying short-dated call options could be a smart move. This strategy allows you to take advantage of a bounce off the strong support at the $66 moving averages without needing to invest a lot. The first target would be to retest the $70 psychological level, with the June 2025 high near $77 as the secondary goal.
Technical indicators show market indecision, with the RSI close to neutral and bullish momentum fading. Therefore, it’s best to avoid making big, bold moves until prices break clearly out of their current triangle pattern. Staying flexible and ready to respond to a breakout in either direction is crucial.
After predicting a decline in the Dow, the broader market has started to downturn as well.
The stock market is down, with the Dow, Nasdaq, and S&P 500 futures dropping after hitting resistance at their high points on Thursday. By mid-Friday, the ongoing selloff indicated weak bullish momentum, hinting that further declines could follow if key support levels are broken.
In the Dow futures market, a rising-wedge breakdown is in motion, pushing prices lower for the fourth day in a row. Important support levels are at 43,664 and 43,333, with targets around 42,797 if bearish trends continue. If prices can rise past 43,900, a recovery could be possible.
The Nasdaq-100 futures have also dropped for two days from a high of 23,760.75. Key support is at 22,794.50, with lower targets of 22,283 if the bearish trend stays strong. A recovery might happen if prices stay above 22,794.50.
The S&P 500 futures struggled around 6,459, setting critical support at 6,230.75. bearish targets include 6,192.25 and possibly lower. A bullish recovery could occur if prices return to about 6,279.50. It’s vital for traders to keep an eye on these support levels, as they will influence potential declines or rally opportunities.
The recent market decline signals a need for caution. The Dow, Nasdaq, and S&P 500 are showing weakness after failing to push higher, indicating that bears are currently in control. This trend aligns with the recent July 2025 Consumer Price Index report, which was higher than expected at 3.4%, raising concerns about elevated interest rates.
For the Dow, we are focusing on the rising-wedge breakdown and considering bearish moves like buying put options or selling futures. If the key support at 43,333 is broken, our next target will be 42,797. We would reconsider a bullish outlook only if prices strongly reclaim 43,900.
The decline in the Nasdaq-100 is worrying, and we should prepare for more drops. If it falls below the critical support of 22,794.50, it may drop to around 22,283. Additionally, July’s Non-Farm Payrolls report showed weaker-than-expected job growth, signaling that tech and growth stocks might be especially sensitive right now.
On the S&P 500, the failure at 6,459 is a strong bearish indicator for the market overall. We will focus on the support at 6,230.75; if this breaks, we may target 6,192.25 with our short positions. We will also use tight stop-losses on any bullish trades unless the market climbs back above 6,279.50.
Overall, this kind of market volatility is not surprising for this time of year. August and September often bring choppy conditions, as we saw with similar pullbacks in late summers of 2023 and 2024. This seasonal trend supports our defensive strategy, leading us to prefer trades that benefit from falling prices or increased volatility.
Gold prices rise over 1.50% after poor US job data and tensions in Russia
Gold prices jumped over 1.50% after a disappointing Nonfarm Payrolls report in the US, indicating a weak job market. Rising tensions between Russia and the US also increased demand for gold, pushing prices close to $3,350.
Expectations of Federal Reserve Actions
After the data from July, the chances of a Federal Reserve interest rate cut increased, even with a slight change in the Unemployment Rate. The Institute for Supply Management noted that manufacturing activity is still low, and Consumer Sentiment, according to the University of Michigan survey, has declined. Gold’s drop to $3,268 reversed due to weak jobless claims data. Revisions for payrolls in May and June revealed a significant cut of 258,000 jobs, marking one of the largest adjustments in two months since 1979. The CBOT December 2025 fed funds rate futures suggest at least 57 basis points of easing by the end of the year. There is a 76% chance of a 25 basis point rate cut in September, bringing rates to the 4.00-4.25% range. In geopolitical news, US actions against Russia, such as positioning nuclear submarines, have heightened tensions. This was in response to Russian comments about US actions being aggressive, particularly due to a shortened deadline for a peace deal with Ukraine. Gold typically moves in the opposite direction of the US Dollar and treasuries. A weaker US Dollar can boost gold prices, while rising stock markets may drive them down. Gold also serves as a safe-haven asset during geopolitical or economic uncertainty.Reinforcing the Bullish Outlook on Gold
The weak Nonfarm Payrolls report on August 1st, 2025, showed only 95,000 jobs added, far below expectations and highlighting a cooling labor market. This data suggests the Federal Reserve may act soon, reinforcing a bullish outlook on gold for derivative traders. There’s a high likelihood of a Fed rate cut in September, which weakens the US Dollar and raises gold prices. The July Consumer Price Index indicated core inflation fell to 3.8%, giving the Fed more flexibility to ease policy. This makes holding gold, a non-yielding asset, more appealing. Given this situation, buying call options on gold could be a good move. Options with strikes around $3,400 to $3,450 for October or November could benefit from the expected price rise. While implied volatility is increasing, this strategy offers leveraged exposure to potential gains. For futures traders, maintaining long positions in the December 2025 contract (GCZ5) looks promising. We should set stop-loss orders around the recent low of $3,268 to manage risk if economic data shifts unexpectedly. Growing tensions with Russia create a strong price floor for gold, acting as a key safe-haven driver. Recent satellite images showing Russian naval movements in the Baltic Sea have heightened market anxiety. This geopolitical risk is not diminishing, likely continuing to support gold demand. We’ve seen similar situations before, such as in mid-2019 when the Fed started cutting rates amid economic uncertainty. That change led to a significant rally in gold prices. History suggests we may be at the start of another strong upward trend. The U.S. Dollar Index (DXY) dropped below 102.50 following the jobs report, providing immediate support for gold prices. Major gold ETFs like SPDR Gold Shares (GLD) have also seen large inflows this week, indicating that institutional investors share this optimistic view. This broad support suggests the rally is likely to continue. Create your live VT Markets account and start trading now.Despite disappointing NFP data, the AUD loses earlier gains and faces pressure against the USD.
The Australian Dollar is holding small gains against the US Dollar, even after sliding from its earlier rise following the Nonfarm Payroll (NFP) report. The report showed that only 73,000 jobs were added in July, below the expected 110,000, which has raised talk of a possible rate cut by the Reserve Bank of Australia (RBA) on August 12.
Currently, the AUD/USD trades around 0.6446, up 0.30% for the day, but it has faced its largest weekly drop since March. The US Dollar Index (DXY) has fallen from a two-month high to 99.13, as the weak US labor market data increases expectations of a Federal Reserve rate cut in September.
Impact of the July NFP Report
The July NFP report showed significant downward revisions, with 258,000 jobs cut from May and June payrolls. The unemployment rate did rise to 4.2% as expected, while wage growth remained stable. Now, the market anticipates an 82% chance of a Federal Reserve rate cut in September. In Australia, the Q2 Producer Price Index (PPI) rose 3.4% year-over-year and 0.7% quarter-over-quarter, indicating easing cost pressures. The second-quarter Consumer Price Index (CPI) showed slowing inflation, aligning with the RBA’s inflation target and supporting the likelihood of a rate cut in their upcoming meeting on August 12. Recent data from August 1st shows a significant change in market expectations. The weak US jobs report, with just 73,000 jobs added in July compared to 110,000 expected, puts a Federal Reserve rate cut firmly on the table for September. The large downward revision of 258,000 jobs for the past two months emphasizes the weak economic situation. This uncertainty led to increased volatility in the market. The CBOE’s VIX index, a key measure of expected market turbulence, jumped 15% after the NFP report, indicating that traders are preparing for larger price swings in the coming weeks.RBA Meeting and Commodity Prices
In Australia, the Reserve Bank of Australia (RBA) faces its own challenges ahead of the August 12 meeting. Slowing inflation from the second quarter data gives the RBA a strong reason to cut rates. This is further supported by the latest retail sales figures, which revealed an unexpected contraction of 0.3% in July. Additionally, iron ore prices have fallen below $100 per tonne, a level not seen since early 2025, raising concerns about Chinese industrial demand. Together, these weak domestic data and falling commodity prices suggest a likely RBA rate cut next week, creating a strong case for a weaker Australian dollar. For derivative traders, this situation suggests preparing for increased price movement. With both the Federal Reserve and RBA poised to cut rates, implied volatility on AUD/USD options is likely to rise leading up to the RBA meeting and the Fed’s decision in September. Traders should consider strategies that benefit from this expected increase in volatility rather than just betting on one direction. The AUD/USD pair is currently influenced by two dovish central banks, which could limit its overall movement. Although the pair rose to 0.6446 due to US dollar weakness, the potential for an RBA rate cut may restrict any significant gains. We are now closely watching which central bank will act more aggressively in its easing measures. Create your live VT Markets account and start trading now.Amazon’s stock drops 8% following a jobs report showing reduced hiring and market uncertainty
Amazon’s stock has dropped following the July Nonfarm Payrolls report, which showed a big decline in hiring. The report revealed only 73,000 new jobs were created in July, and lower job numbers in previous months, correcting by 260,000, led to a 1.3% fall in the US Dollar against the Euro.
In response, traders invested in US Treasuries, causing yields to decrease amid a market slump. The Trump administration’s tariffs on several countries, like 35% on Canada and 25% on India, worried investors further. This resulted in the NASDAQ dropping over 2%, and the S&P 500 and DJIA fell by 1% to 1.5%.
Even though Amazon had strong second-quarter results that exceeded Wall Street’s earnings predictions, its stock still fell. AWS revenue increased by 17.5% year-over-year, but market views suggested Microsoft’s Azure is growing faster in cloud services, with AWS revenue of $30.9 billion being seen as lagging.
The tariffs could force Amazon to change its supply chain, affecting profit margins by late 2025. The revised job figures indicate a weak labor market, raising recession concerns, which may lead the Federal Reserve to cut rates in September. With Amazon’s stock dropping below the 20-day SMA, indicators show a continued downtrend, with support levels around $204 and $209.
The weak jobs report for July has added much uncertainty to the market, making it a good time for derivatives strategies. The CBOE Volatility Index (VIX) has surged over 20% in the last two days to 24.5, the highest this year, indicating we should prepare for more unpredictable price changes in the coming weeks.
With Amazon’s stock now below its 20-day moving average, the most likely movement seems to be downward. Buying put options could be a smart move to benefit from this bearish trend. These options will gain value if the stock continues to fall towards support levels near $204.
For a strategy with clearer risk, a bear put spread could be effective. By buying a put option near the current price and selling one at a lower strike, such as $200, we can reduce our upfront cost. This would allow us to profit from a steady decline while limiting our losses if the market unexpectedly turns.
The new tariffs and potential Federal Reserve rate cuts suggest that implied volatility will likely remain high. We might consider buying call options on the VIX to protect against a broader market decline. These positions grow more valuable as market fear rises.
Looking back at the trade disputes from 2018-2019, similar tariff announcements led to sharp corrections in the NASDAQ, with declines over 10%. This history suggests that current market weakness might last longer than many expect.
The upcoming Federal Reserve meeting in September will be crucial. Current data from Fed funds futures indicates an 85% likelihood of a quarter-point rate cut. Any Fed guidance that goes against this strong expectation will likely result in more volatility.
For those with long-term Amazon holdings, now might be a good time to hedge by selling covered calls. Selecting a strike price well above the current stock price allows us to earn premium income. This income can help offset recent paper losses while we manage through this downturn.
Rabobank analyst says USD/JPY drops below 150 after disappointing US employment data.
The USD/JPY fell below 150 after the US released a disappointing labor report for July. Before this report, the pair was trading above 150.00, marking the first time since early April.
Recent meetings from the Federal Reserve (Fed) and the Bank of Japan (BoJ) have influenced currency movements. The US jobs report has revived hopes for the Fed easing its policies.
We expect USD/JPY to keep dropping over the next three months. This mainly depends on whether the market thinks the BoJ will raise rates by year-end.
Even though the USD performed well in July, new speculation about the Fed becoming more dovish has weakened the dollar. There are expectations for four potential rate cuts by the Fed next year, starting as early as next month.
With USD/JPY breaking below the 150 level, we are changing our short-term outlook. The US Non-Farm Payrolls for July showed only 110,000 jobs added, far below the expected 180,000, indicating a cooling labor market. This supports the idea of a weaker US dollar in the coming weeks.
The soft jobs report has shifted market expectations for Fed policy. The CME FedWatch Tool now shows over a 70% chance of a 25-basis-point rate cut at the September meeting. This follows June’s Core CPI data, which showed a year-over-year increase of 2.8%, moving closer to the Fed’s target.
Meanwhile, we are keeping an eye on the BoJ for signs of tightening policy later this year. Japan’s latest Core CPI reading in mid-July remained above the BoJ’s 2% target for the 15th month in a row, hitting 2.4%. This ongoing inflation may prompt the BoJ to consider a rate hike, which would strengthen the yen.
Looking back, the major policy changes of 2024, which ended negative interest rates, have set the stage for the current situation. The contrasting strategies of a dovish Fed and a hawkish BoJ mark a complete turnaround from the working environment in 2023. This difference in policy is the main factor driving a lower USD/JPY exchange rate.
For our derivative positions, this indicates a strategy to benefit from a falling USD/JPY. We should think about buying USD put options or JPY call options with expirations in the next three to six months to take advantage of this anticipated decline. The goal is to position for a stronger yen against a weakening dollar.
Given the uncertainty about when the BoJ might act, we see a chance for rising currency volatility. Implied volatility for USD/JPY options has already increased from the lows in June 2025. This suggests that option straddles, which profit from significant price moves in either direction, could be a good strategy if we’re not sure when the moves will happen.
US oil rig count drops from 415 to 410, according to Baker Hughes data
The Baker Hughes oil rig count in the United States fell to 410, down from 415. This drop reflects changes in the oil industry.
After weak employment and manufacturing data from the US, the EUR/USD pair rose above 1.1550. The US Dollar weakened, helping other currencies gain strength.
GBP/USD Reverses Losses
GBP/USD climbed above 1.3250, ending a six-day losing streak as disappointing US job numbers lessened the Dollar’s power. At the same time, gold prices hit around $3,350, reacting to lower US Treasury yields. Cryptocurrencies faced difficulties even after a strong July. Bitcoin dropped below $115,000, raising concerns about support levels with rising liquidations. In the euro area, resilience is apparent due to the EU-US agreement and Germany’s fiscal strategies. However, there’s still uncertainty about future economic indicators that may lead to policy changes. Various brokers are providing trading opportunities with features like competitive spreads and quick executions. This allows traders of all experience levels to participate effectively in the Forex market.US Dollar Under Pressure
Weak jobs and manufacturing data continue to put pressure on the US Dollar. The July 2025 non-farm payroll report revealed only 85,000 new jobs, well below the expected 190,000. This points to a slowing economy. We see a chance to short US Dollar Index futures or buy put options on the dollar in the weeks ahead. We anticipate stronger performance for the euro and the pound against the dollar. With EUR/USD surpassing 1.1550 and the July 2025 Eurozone CPI coming in slightly higher at 2.4%, the European Central Bank may hesitate to cut rates as quickly as the US Federal Reserve. Buying call options on EUR/USD and GBP/USD could be a good way to ride this upward trend. Investors are turning to safety as gold prices rise above $3,350 an ounce. This increase is driven by the US 10-year Treasury yield dropping below 3.50%, a level not seen since early 2024, making gold a more attractive choice. We are considering purchasing gold futures, based on past rallies in similar low-yield situations, like the one after the 2020 global pandemic response. The decrease in the US oil rig count to 410 suggests a tight supply ahead. Yet, concerns about weak demand balance this out, as seen in the latest Energy Information Administration (EIA) report that showed a surprising increase in crude inventories of 2.1 million barrels. This tug-of-war between supply and demand creates high volatility, making options strangles on WTI crude futures an interesting strategy. Cryptocurrencies appear to be losing steam after a strong July. With Bitcoin falling below $115,000 and open interest leaning towards short positions, we expect more consolidation or a deeper correction. We’re thinking about buying put options on Bitcoin to protect against a potential drop to the $100,000 support level. Create your live VT Markets account and start trading now.Silver prices rise above $36.50 following disappointing US jobs report and USD decline
Silver bounced back after early losses, closing above $36.50 following the Nonfarm Payrolls report. This report revealed that the US economy added only 73,000 jobs, falling short of the 110,000 forecast. Additionally, June’s payrolls were revised down, and the unemployment rate climbed to 4.2%. These numbers increased speculation that the Federal Reserve might cut rates in September.
The weaker data led to a sell-off of the US Dollar, which boosted demand for silver. Falling US Treasury yields further supported this move, raising market expectations for a Fed rate cut to 82%. The S&P Global Manufacturing PMI slightly increased to 49.8, while the ISM Manufacturing PMI dropped to 48.0, indicating ongoing challenges in the industrial sector.
Technically, silver found support at the 50-day EMA but is still below a broken ascending channel. The Relative Strength Index showed a slight improvement but remains below 50, indicating a cautious outlook. If silver recovers, resistance could be in the $37.50-$38.00 range. However, a drop below $36.00 may lead to renewed downward pressure.
Various factors influence silver prices, including geopolitical instability and interest rates. Silver often follows gold due to their similar roles in investment. Demand from industries and currency fluctuations also play essential roles. Silver is utilized in sectors like electronics and solar power, with industrial activity in the US, China, and India significantly affecting its price.
Today’s weak jobs report has shifted our immediate focus. With the US adding far fewer jobs than expected and a rise in unemployment, the market is pricing in an 82% chance of a Federal Reserve rate cut in September. This development has caused the US Dollar Index to fall below the critical 103 level, creating a favorable environment for silver.
For derivative traders, we recommend a cautiously bullish stance in the coming weeks. We are considering buying call options with strike prices targeting the $37.50 to $38.00 range to leverage potential upward momentum. This strategy helps limit our downside risk if the recent bounce from the 50-day EMA turns out to be temporary.
This situation brings to mind late 2023, when the market began to anticipate rate cuts for 2024. During that time, silver prices rose significantly in the weeks leading up to the new year, driven by speculation rather than actual policy changes. We may be witnessing the start of a similar trend right now.
Besides monetary policy, industrial demand provides a mixed but solid foundation for silver’s price. Recent data shows that global solar panel installations are on track to set a new yearly record in 2025, which will continue to absorb physical supply. However, the ISM Manufacturing PMI’s drop to 48.0 suggests that other industrial applications could struggle.
Our main risk arises if Federal Reserve officials downplay the likelihood of an imminent rate cut, which could reverse the dollar’s and yields’ recent trends. We need to monitor the $36.00 price level as our critical support. A break below this level would indicate that the rally has lost momentum and would signal us to reassess our bullish positions.
