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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Switzerland’s Consumer Price Index (CPI) for July increased by 0.2% compared to last year, which is higher than the expected 0.1%. This information, released by the Federal Statistics Office on August 4, 2025, indicates changes in inflation trends in the country. The Core CPI, which excludes unstable items like food and energy, went up to 0.8% year-on-year from a previous 0.6%. This change indicates a shift in core inflation trends, showing adjustments in Switzerland’s economic situation as the year continues.

Inflation And The Swiss National Bank

This new inflation data from Switzerland suggests that deflationary pressures may not be as strong as previously thought. With core inflation now at 0.8% year-on-year, we need to reassess our expectations for the Swiss National Bank (SNB). This unexpected increase makes it more likely that the SNB will pause its rate cuts. Previously, the SNB was a leader in easing policy, having lowered rates in both March and June of 2024. However, this new data complicates matters ahead of their upcoming meeting on September 18, 2025. The market was leaning towards another rate cut, but now those chances are becoming less likely. For traders, this will have a direct impact on Swiss Average Rate Overnight (SARON) futures. We can expect a sell-off in contracts for the fourth quarter of 2025 as the odds of another rate cut this year decrease. This adjustment reflects the market’s shift towards a more cautious SNB.

Implications For The Swiss Franc

In the foreign exchange market, a less accommodating SNB is positive news for the Swiss franc (CHF). It’s wise to reconsider any significant short positions against the franc, especially against the euro and the dollar. Implied volatility on CHF options will likely rise as traders prepare for potential currency strength leading up to the September meeting. The EURCHF exchange rate, which reached a one-year high near 0.99 just last month, may now face significant resistance. The unexpected inflation figure gives the SNB the opportunity to back away from the currency weakening it previously supported. This makes purchasing call options on the CHF a more appealing hedge or speculative move. While 0.8% core inflation is still low compared to the 3.4% peak seen in 2022, the change’s direction is what influences markets in the short term. Over the coming weeks, it will be crucial to monitor how interest rate swaps price in the chance of a final rate cut in 2025. This new data suggests that betting on that outcome is becoming riskier. Create your live VT Markets account and start trading now.

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Today, we’re focusing on the Swiss Consumer Price Index (CPI) report, which is expected to show a 0.1% increase year-on-year. This result is not likely to change how the Swiss National Bank (SNB) operates, as they are not planning to adjust rates unless there are consistent changes in the data. The Swiss Manufacturing Purchasing Managers’ Index (PMI) reached its highest level in two years recently. However, we may see future figures affected by potential increases in US tariffs.

Key Market Developments

We don’t anticipate any major market news unless something unexpected happens. This week, all eyes will be on comments from the Federal Reserve, along with the US ISM Services PMI and US Jobless Claims data. This morning, the Swiss CPI for July was announced at 0.2% year-over-year, which aligns closely with expectations. This low inflation supports our view that the Swiss National Bank will maintain current rates, which were last cut in March and June of 2024. Therefore, we expect minimal fluctuations in the franc, making short-volatility strategies on USD/CHF options attractive in the short term. With Swiss data providing little guidance, we’ll shift our focus to the United States this week. We’re looking for hints from Fed officials about their future plans, especially since they decided to keep rates steady during the July 2025 meeting. The market anticipates continued high rates, so any signals suggesting a softer approach could lead to big movements in equity and bond markets.

Upcoming US Economic Indicators

The US ISM Services PMI, which will be released later this week, is an important event to monitor. Last month, in July 2025, it had a solid reading of 53.5. However, forecasts suggest a slight decrease to 53.0, indicating the service sector may be slowing down. If the number drops below 52, it could indicate a quicker slowdown, prompting traders to buy put options on the S&P 500 as protection against recession concerns. We will also keep a close eye on the weekly US Jobless Claims data. Claims have stabilized around 220,000 for the last few months, showing a tight labor market. However, if claims unexpectedly rise above 235,000, it could alarm the markets and increase demand for VIX futures as traders prepare for more volatility. Create your live VT Markets account and start trading now.

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Eurostoxx futures climbed 0.6% in early European trading. This slight increase follows the steep losses from last Friday. German DAX futures rose by 0.5%, while UK FTSE futures also increased by 0.5%. Investor sentiment has turned more positive, shifting away from worries about US labor market data to the possibility of Federal Reserve rate cuts.

Market Sentiment Shift

Even with the rise, today’s gains don’t fully recover last week’s big losses. It’s important to remember this may just be a short-term pause in the ongoing downward trend. European markets, like the Euro Stoxx 50, are seeing a small rebound this Monday, August 4th, after a rough end to last week. The market seems to view Friday’s poor US jobs report as a sign that the Federal Reserve might cut interest rates soon. The hope for cheaper money is giving stocks a boost this morning. The shift was sparked by the July Non-Farm Payrolls report from last Friday, which revealed that the US economy added only 50,000 jobs, far short of the expected 180,000. The unemployment rate also rose to 4.2%, its highest level this year. These figures show that the economic slowdown we’ve been worried about might be speeding up. As a result, futures markets now indicate a greater than 70% chance that the Fed will cut rates at its next meeting in September, a big leap from the 20% chance seen last week. This significant shift in expectations is the main reason for today’s bounce. Traders are betting that bad economic news could actually be good for the markets.

Investment Strategies Amid Volatility

However, we should be cautious not to get too excited about this small rally. Europe’s volatility index, the VSTOXX, remains high above 25, showing that there is still a lot of fear beneath the surface. This might turn into a “bull trap” before another drop. For traders who think this rally is temporary, buying put options on the Euro Stoxx 50 might be a good strategy. This approach can be profitable if the index reverses today’s gains and continues the downtrend from last week. It allows for a bet on further weakness while managing risk. Looking back, we noticed similar situations in 2022 when weak economic data led to brief rallies fueled by hopes of a central bank shift, only for markets to fall again. The current scenario feels precarious, and the sharp losses from Friday are still fresh in our minds. Considering the uncertainty, strategies that benefit from major price swings, like straddles, might also be worth looking into for protection against a sharp move in either direction. Create your live VT Markets account and start trading now.

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The US dollar’s strength weakened after a surprise drop in US jobs data last Friday. Previously strong, the dollar faced challenges. The EUR/USD pair increased from eight-week lows around 1.1400 to almost 1.1600, testing important technical levels. Both sellers and buyers hold a neutral short-term bias, with no major shift toward selling the dollar yet. The USD/JPY pair fell from above 150.00 to about 147.00, crossing critical moving averages, which indicates a bearish short-term outlook. This change is driven by fluctuating bond yields and uncertainties in US-Japan trade relations. The GBP/USD pair broke a six-day losing streak, but the recovery was limited, failing to surpass key technical levels. It maintains a bearish to neutral bias depending on price movement around these levels.

USD/CAD Patterns

The USD/CAD pair shows similar patterns, trading between key hourly moving averages without strong negative momentum. The AUD/USD pair rose above its 100-hour moving average after the weak jobs data impacted the dollar. However, it remains neutral and needs more upward movement to favor buyers decisively. Overall, the charts indicate weaker dollar momentum with a neutral bias, but not a clear downturn. Ongoing weak labor data might push the Fed toward rate cuts, capping the dollar’s potential upside. Inflation worries from tariffs and data politicization could lower confidence in US economic data, complicating the dollar’s outlook. The weak US jobs report from Friday, August 1st, has shifted the dollar’s situation. The economy added only 95,000 jobs instead of the expected 180,000, and the unemployment rate rose to 4.1%. This surprised many and capped the dollar’s strength. This sudden weakness has led markets to reconsider the Federal Reserve’s next steps. Futures for fed funds show rate cut expectations for September jumped from about 30% last week to over 70% this morning. This rapid change in interest rate expectations is the key reason for the dollar’s drop, especially against the yen.

Derivative Traders and Volatility

For derivative traders, volatility is back. The VIX, a measure of expected market swings, rose to 18 following the jobs data, marking its highest level in three months. This suggests we should brace for larger price movements in the coming weeks, making options strategies more appealing but also pricier. The technical outlook is currently mostly neutral, meaning the dollar isn’t crashing, but its upward trajectory is blocked. A smart response would be to hedge long dollar positions with puts or consider selling call options on pairs like USD/CAD, which is still above key support. We aren’t yet in a strong downtrend, so aggressive bearish bets are premature. The most notable weakness is in USD/JPY, which dropped through key support levels to nearly 147.00 as US bond yields fell. The diminishing interest rate gap between the US and Japan makes holding dollars less attractive than yen. Buying puts on USD/JPY provides a direct way to capitalize on this weakness. Conversely, pairs like EUR/USD and AUD/USD have shifted to a neutral bias, stuck between technical levels. This price action could create an opportunity to sell options strangles, gathering premium while the market decides on its next move. However, a significant break in either direction could risk this strategy. Fundamentally, the situation is complicated by persistent inflation, influenced by tariffs. The last CPI reading in July 2025 showed 3.4%, putting the Fed in a tough position, similar to the policy challenges faced in 2022 and 2023. The conflict between slowing growth and ongoing inflation creates substantial uncertainty for the dollar’s future. Create your live VT Markets account and start trading now.

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Expiring foreign exchange options for August 4 are important for the EUR/USD pair, especially between 1.1550 and 1.1600. The US dollar weakened after last week’s job report revealed significant downward revisions to payroll figures. Additionally, the dismissal of the BLS chief and shifts in Fed funds futures toward a potential September rate cut further contributed to the dollar’s decline. Consequently, EUR/USD is currently trading between 1.1497 and 1.1610, its major hourly moving averages.

Euro Us Dollar Expiry Importance

The EUR/USD expiry near 1.1600 holds more significance and may limit volatility during European trading hours. These expiries could keep price movements steady until Wall Street opens. We observe substantial EUR/USD option expiries between 1.1550 and 1.1600, which might limit the pair’s upside in the short term. This comes after the dollar’s decline following a disappointing U.S. jobs report, which showed only 95,000 new jobs in July compared to an expected 180,000. These expiries are likely to keep price movements subdued, especially during the European session. The market is responding strongly to signs of slowing growth, with Fed funds futures indicating a 70% likelihood of a rate pause in September. This marks a significant shift from a month ago when a rate hike was still considered. With last month’s core CPI at a stubborn 3.8%, the Federal Reserve faces a tough situation.

Derivative Trading Strategies

This environment feels reminiscent of the sharp changes in sentiment we witnessed in 2023 when economic data prompted sudden shifts in central bank policies. Back then, dollar volatility surged following key jobs and inflation reports. We can anticipate similar fluctuations now as the market assesses whether this is a fleeting issue or the beginning of a new trend. For derivative traders, selling short-dated call options with strike prices above the 1.1610 resistance level could be a good strategy for collecting premium. Conversely, those who believe in the ongoing weakness of the dollar might see this as a chance to buy longer-dated call options, expecting a breakout later in the quarter. Monitoring the pair’s reaction around its key moving averages near 1.1497 will be essential for timing any trades. Create your live VT Markets account and start trading now.

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