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European indices mostly finished higher, but gold declined as the US dollar strengthened.

The main European stock markets closed with small gains. Italy’s FTSE MIB led the way with an increase of 0.98%. Germany’s DAX climbed by 0.19%, France’s CAC rose by 0.06%, the UK’s FTSE 100 gained 0.01%, and Spain’s Ibex went up by 0.23%. European 10-year bond yields had mixed results. Germany’s yield increased by 1.6 basis points to 2.701%. France’s yield went up by 2.3 to 3.366%. In contrast, the UK’s yield dropped by 2.2 basis points to 4.597%. Spain’s yield stayed the same at 3.289%, while Italy’s yield rose by 0.6 basis points to 3.543%.

US Market Overview

US stock indices experienced gains, with the Russell 2000 and NASDAQ performing the best. The Dow industrial average rose by 0.06%, the S&P by 0.21%, the NASDAQ by 0.41%, and the Russell 2000 by 0.84%. Microsoft and Meta are about to report their earnings, with estimates of $3.38 EPS and $73.86 billion in revenue for Microsoft, and $5.88 EPS and $44.81 billion for Meta. US bond yields increased: the 2-year at 3.899%, the 5-year at 3.941%, the 10-year at 4.364%, and the 30-year potentially at 4.904%. The US dollar strengthened against the AUD, NZD, EUR, and GBP. Meanwhile, gold prices dropped by $30.24 to $3297, with the 100-day moving average at $3250.48. As we await the FOMC decision, markets seem to be preparing for a strong, hawkish announcement from the Federal Reserve. Rising US bond yields and a stronger dollar signal that traders expect higher interest rates to last longer. This trend continues the fight against persistent inflation, which was common during 2024, often exceeding 3%. US stocks show cautious optimism, but the real challenge will be the tech giants reporting this week. The NASDAQ has gained over 20% in the past year, raising high expectations for Microsoft and Apple. Traders might want to consider options to hedge against potential disappointments, which could lead to a swift sell-off.

Market Tension and Strategy

Despite today’s modest gains, market tension is building ahead of these key events. The CBOE Volatility Index (VIX) is trading around 18, much higher than the calmer levels seen in 2024. Buying call options on the VIX may be a cost-effective way to protect a portfolio from possible market shocks in August. In the currency market, the US dollar remains dominant. The Euro’s weakness continues a trend that started when the European Central Bank began cutting rates in mid-2024, ahead of the Fed. If the FOMC meets hawkish expectations, we might see EURUSD dip below the crucial 1.1447 support level. In Europe, Italy’s market shows impressive performance compared to the other sluggish markets on the continent. This suggests domestic factors are boosting Italian stocks while Germany and the UK show little movement. A possible strategy could be to favor Italian assets over German ones. Gold’s significant drop today is linked to rising bond yields, with the US 10-year yielding over 4.36%. As bond yields rise, the appeal of non-yielding gold decreases. We will closely monitor the $3250 level; a drop below this 100-day moving average might indicate further price declines. Create your live VT Markets account and start trading now.

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AMD shares rise from the blue box zone: an analysis of the Elliott Wave trading strategy

AMD’s stock recently dropped, reaching a point known as the Equal Legs area or Blue Box. This suggests that AMD is in a wave 4 pullback, and it may decline further in the short term toward the Blue Box. We’re looking at a target range of $153.72 to $149.60 for buying opportunities. It’s best not to sell AMD, as the overall trend is upward. We expect a strong bounce back from the Blue Box. To manage your trades, make your positions risk-free when the stock hits the 50% Fibonacci level. Set stop-loss orders below the 1.618 Fibonacci extension. The stock found support at the Blue Box and is now moving towards new highs. As long as it stays above the $149.27 low, we expect more upward movement. Trading in the Foreign Exchange market can offer high returns, but it also carries significant risks. It’s important to evaluate your investment goals, experience, and risk tolerance before starting. Forex trading is highly leveraged and can lead to large losses. While we provide trading advice in good faith, success is never guaranteed, and our content is protected by copyright laws with strict penalties for unauthorized use. Looking back a few weeks, AMD’s stock pulled back just as we expected, finding support between $153.72 and $149.60. This confirmed that the dip was a healthy pause in a larger upward trend, reinforcing our belief in the stock’s strength. As of late July 2025, AMD is trading well above that support level and is nearing $185. This strength follows AMD’s recent Q2 2025 earnings report, which exceeded expectations due to strong demand for their MI400 series AI accelerators. We believe this positive momentum will continue, pushing the stock higher in the coming weeks. For those trading derivatives, this is a good time for bullish strategies. We see potential in selling out-of-the-money cash-secured puts with expiration dates in August or September, targeting strike prices around $170. This strategy lets us collect premiums while setting a lower entry point if the stock dips briefly. Recent industry reports from this quarter strengthen our confidence. AMD’s market share in data centers has climbed to over 35%. We are keeping a close eye on the $149.27 low from the last pullback. As long as the price stays above this level, we expect upward movement. Traders looking to maximize their gains might consider using call debit spreads. With increased implied volatility following the positive earnings news, spreads offer a cost-effective way to position for a move toward new all-time highs. We view this as a continuation of the primary upward trend. This setup reminds us of the consolidation phase at the end of 2024, where a similar dip was quickly bought up, leading to a multi-month rally. That past pattern suggests that this recent bounce isn’t just a short-term swing. We anticipate this upward momentum will continue through the rest of the summer.

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Federal Reserve will announce interest rate decision and policy statement after July’s meeting

Following its July meeting, the Federal Reserve decided to keep the federal funds rate steady at 4.25%–4.50%. This decision was widely expected given the current economic climate. The Fed Chair noted that while inflation is above the target, the economy remains strong and the low unemployment rate indicates near-maximal employment. Some policymakers showed interest in reducing rates. Ongoing trends in consumer spending and the housing market are leading to slower economic growth.

Economic Outlook

The Fed’s statement highlighted ongoing uncertainty about the economic future, even as key indicators suggest moderate growth in 2025. While inflation is somewhat high, the labor market is solid. Two members of the Fed disagreed with the decision, as they preferred a rate cut, arguing that current policies may be too tight. The CME FedWatch Tool shows a low chance of rate cuts in July but a greater possibility in September. Policymakers anticipate more cuts in the coming years, signaling changes ahead for the economy. Market reactions showed the US Dollar fluctuating but staying strong against currencies like the Australian Dollar. The heat map illustrates changes in major currencies versus the dollar, emphasizing the economic narratives and expectations linked to rate decisions and future fiscal policies. With the Federal Reserve keeping rates steady, we expect the upcoming weeks to focus on data-driven trading. The divide among Fed members, with some favoring rate cuts, means inflation and employment reports will be closely examined. This creates opportunities in interest rate derivatives, especially around the September policy meeting, where the market is factoring in a greater chance of a cut.

Trading Strategies

Traders should consider strategies that take advantage of this uncertainty regarding timing rather than direction. While rates are likely to decrease overall, the path to that outcome will be bumpy. Options on SOFR futures for the September and December 2025 contracts can help traders position for either a cautious Fed or a surprise early move. The ongoing strength of the US dollar, especially against currencies like the Australian Dollar, illustrates this policy gap. Recent data shows US unemployment holding steady at 4.0%, contrasting with signs of slowing in other economies, justifying the dollar’s strength. We believe holding long positions in the dollar against a mix of currencies from more dovish central banks is a solid strategy. This scenario resembles what we experienced in late 2023 when the market was trying to determine the end of a historic rate-hiking cycle. The shift from holding rates to easing them is rarely smooth and usually brings volatility. Therefore, we expect similar price fluctuations over the next two months. With the Fed maintaining its position, we are closely monitoring incoming economic data. The latest Consumer Price Index report indicated core inflation stayed sticky at 3.3%, supporting the Fed’s choice to wait. We are positioning ourselves for significant market movements around the upcoming jobs and inflation data releases, as these will be the main drivers affecting Fed expectations. Create your live VT Markets account and start trading now.

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GBP/USD trades below the 100-day moving average, signaling a shift towards bearish market conditions.

The GBP/USD has hit a new low due to strong selling pressure. The pair is currently trading below its 100-day moving average of 1.33339, which used to provide temporary support but is now failing with sellers in control. This price drop makes the technical outlook more negative, continuing the bearish trend. Attention is now on the 38.2% retracement level of the 2025 move, from low to high, at 1.31403. This level coincides with a critical swing area between 1.3145 and 1.3202, making it an important target.

Price Dynamics and Key Levels

If the price drops below this range, sellers may gain further momentum. The current struggle lies between the resistance at the 100-day moving average and the support range of 1.3140–1.3200. The Federal Open Market Committee is set to meet soon, and rates are likely to remain steady. However, it’s uncertain if the Federal Reserve will adopt a more dovish stance, especially with rising inflation expectations due to tariffs. The GBP/USD is breaking below its 100-day moving average, signaling bearish trends for the upcoming weeks. As long as the pair stays under 1.33339, the most likely path is downward. This suggests that strategies favoring a weaker pound against the dollar should be explored.

Fed Meeting and Market Strategies

The main downside target is the range between 1.3140 and 1.3202. This area is crucial, representing the 38.2% Fibonacci retracement of the entire 2025 rally. Traders should watch this level as a likely draw for price in the near future. The focus is now on the Federal Reserve’s meeting later today, which will affect market volatility. A dovish outlook is expected due to concerns about new tariffs harming the economy. This may weaken the US dollar and push prices closer to our 1.3140 target. The current market unease is understandable based on recent data. The US CPI for June 2025 showed an unexpected 3.1% increase, mainly due to new tariffs on UK and EU goods introduced last month. The market believes the Fed will prioritize growth over addressing this inflation. History provides a useful reference; the Fed’s pivot in late 2018 during similar trade war pressures and slowing global growth led to a shift from tightening to easing, weakening the dollar significantly. This history supports the anticipation of a softer Fed stance today. Given this outlook, traders might consider buying put options on GBP/USD with expiration dates in August or September 2025. Strikes around the 1.3200 level could offer a way to profit from the expected decline toward the key retracement zone. This strategy limits risk to the premium paid while allowing for potential gains from the downward move. Create your live VT Markets account and start trading now.

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The USDCAD has a bullish outlook, with upcoming resistance levels affecting short-term price movements and trends.

The USDCAD is showing a bullish trend, with important resistance levels between 1.38279 and 1.3833. These levels are highlighted by the 100-day moving average and the 61.8% retracement from the decline in May. The pair is currently above the June high of 1.37969, which is crucial for maintaining its upward movement. Resistance levels at 1.38279 and 1.38335 may attract short-term sellers looking to take profits. If the price breaks above these levels, it could increase buyer confidence, leading to further upward movement. Right now, the USDCAD is down by 560 pips, or 3.968%, year-to-date, which helps the Canadian inflation outlook.

USDCAD Buy Signal Potential

Despite the current decline, there is a chance to “buy US dollars.” However, breaking through the 100-day moving average is key for a stronger bullish outlook. In the past, USDCAD fluctuated within a range starting in November following a rise from September 2024, with spikes related to tariff worries. As tariff concerns eased, the currency pair moved outside this range, eventually dropping to the 2025 low. The current correction is moderate but nearing a significant turning point for USDCAD. The USDCAD remains above the June high of 1.37969. Staying above this level is essential for the uptrend to continue in the coming days. For traders, this level acts as a critical marker for current bullish momentum.

Resistance Challenges Ahead

We are nearing a key resistance zone between 1.3828 and 1.3833. This area, including the 100-day moving average, is a logical point for profit-taking. The recent US jobs report showed 285,000 new job additions, strengthening the case for a stronger dollar and making a breakthrough at this resistance more likely. If the pair moves decisively above 1.3833, traders may consider buying call options to take advantage of further upside. This would indicate a greater buyer confidence and could lead to a more significant upward move. Such a breakout would suggest that the recent “buy US dollar” sentiment is gaining momentum. On the Canadian side, the fundamentals also support a higher USDCAD. The latest inflation data for Canada was 2.7%, slightly below expectations, reducing pressure on the Bank of Canada to act aggressively. Additionally, WTI crude oil prices recently dipped to around $81 a barrel, which poses a challenge for the loonie. However, if sellers manage to defend the 1.3833 resistance level, it may open up opportunities for more cautious strategies. Traders could consider buying put options or creating bear call spreads, betting on a retreat toward the 1.3796 support. This scenario becomes more likely if we see a sudden rise in oil prices or unexpectedly strong Canadian economic data. Even with the recent rally, USDCAD remains down nearly 4% for the year 2025. It’s important to remember that the market was mainly range-bound in late 2024, with tariff concerns causing temporary spikes that eventually faded. This current upward movement is still a correction within that larger downtrend. Create your live VT Markets account and start trading now.

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GBP/USD drops over 60 pips below the 1.3300 mark amid US data

The GBP/USD pair fell over 60 pips during the American session on Wednesday, driven by strong economic data from the US. The British Pound had been strong initially but couldn’t hold up against the growing demand for the US Dollar. The US published positive news, with the ADP Employment Change report showing 104,000 new private sector jobs in July, beating the expectation of 78,000. The revised figures for June also improved, showing a job decrease of only 23,000 compared to the earlier reported 33,000. The flash estimate for Q2 GDP showed a surprising annual growth of 3%, higher than the expected 2.4%. This also marked an improvement from Q1’s decline of 0.5%. The core PCE Price Index rose by 2.5% in Q2, down from 3.5% in Q1. This strong US economic performance comes just before the Federal Reserve’s monetary policy meeting. The Fed is expected to keep interest rates between 4.25% and 4.50%. President Trump has criticized the Fed’s high rates, urging a reduction by three points, which raises questions about how he might react to the Fed’s decision. The GBP/USD has now fallen for six consecutive days, reaching its lowest point since mid-May. Daily analysis reveals a strong downward trend, with initial support near 1.3250 and 1.3200, while potential recoveries could target the 1.3360 and 1.3420 levels. We are witnessing a familiar trend today, July 30, 2025, when comparing it to previous instances of strong US economic data. This pattern, where positive US news supports the dollar and drags down GBP/USD, poses a risk for the coming weeks. The historical context of political pressure on the Federal Reserve serves as a reminder of how quickly market sentiment can change. Currently, the Bank of England faces its own challenges. The latest inflation data from earlier this month shows UK CPI at 2.1%, just above the BoE’s target. This has led to the Bank Rate remaining steady at 5.0% for the last quarter, making traders attentive to any signs of a potential rate cut. In the US, economic indicators paint a stronger picture than in the years following the pandemic. This month’s Non-Farm Payrolls added a robust 190,000 jobs, while the most recent Core PCE reading was 2.8%, indicating that inflation pressures are slowly easing. This data supports the Federal Reserve’s cautious approach, with their benchmark rate at 5.25%. The current differences suggest that implied volatility on GBP/USD options may rise ahead of the central bank meetings in August. Traders might consider long straddles, which allow for profits from major price moves in either direction. This strategy can protect against unexpected policy announcements from either the Fed or the BoE. Looking back at late 2024, the 1.2450 level has proven to be a key support for GBP/USD. Thus, purchasing put options with a strike price under 1.2450 might be a cost-effective way to prepare for a potential decline. This could happen if the Fed maintains a more hawkish stance than the market anticipates. Current market expectations, shown in Fed funds futures, suggest a 30% chance of a US rate cut before the year’s end. This means that any unexpectedly strong US jobs or inflation report in the coming weeks could quickly boost the dollar, putting renewed pressure on the pound, similar to previous sell-offs.

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The Euro faces its fifth consecutive decline as strong US data boosts the Dollar’s performance

EUR/USD is trading around 1.1475, hitting its lowest point since June 23 after falling for the fifth straight day. The Euro is under pressure from a strong US Dollar, fueled by positive US economic data. The ADP jobs report shows an increase of 104,000 jobs in July, reversing last month’s decline. Concerns about the US-EU trade agreement, seen as more beneficial for the US, continue to impact the Euro. Traders are also focused on the Federal Reserve’s policy decision, which could further push the Euro down against the Dollar. The EUR/USD pair is near its weakest level since June, hovering around 1.1475. This week’s decline of over 2.0% highlights the growing pressure on the Euro, influenced by the strength of the US Dollar and expectations of stable interest rates from the Federal Reserve. The US Dollar’s strong performance is based on economic strength, with a 3.0% annual GDP growth in Q2, beating the 2.4% forecast. Inflation measures, including the core PCE Price Index, increased by 2.5% quarter-over-quarter, although some data suggests a move towards lower inflation. Eurostat reported a 0.1% growth in the Eurozone economy for Q2, which was better than expected. While there was slight improvement in the Economic Sentiment Indicator across some Eurozone countries, it did little to help the Euro. Attention is now on the Fed’s upcoming policy announcement and its potential impacts on interest rates. With the Dollar’s momentum, we expect EUR/USD to drift lower in the coming weeks. The clear contrast between strong US growth and weak Eurozone performance supports this outlook. The Federal Reserve’s announcement today will be crucial for the next move. We are considering buying put options on EUR/USD to profit from further declines. This strategy offers a way to manage risks if the price drops below recent lows near 1.1475, especially before the potentially volatile Fed event. Recent data, such as last week’s German IFO Business Climate index falling to 87.3, reflects growing concern in the Eurozone’s largest economy. Next, all eyes will be on the US Non-Farm Payrolls report on August 8, 2025, which we expect to confirm labor market strength shown in the ADP data. A strong NFP report could push the pair towards our next target. This situation reminds us of market conditions in 2022, when a strong Fed and a cautious ECB drove EUR/USD below parity for the first time in 20 years. While we’re not predicting a drop to 1.0000 yet, it’s a reminder of how far the pair could fall under current conditions. The market will be alert to any “higher for longer” statements from the Fed today. A significant drop below the 1.1450 support level, the low from early June 2025, would confirm our bearish outlook. This could lead to testing the key psychological level of 1.1300 in August. We will consider increasing our bearish positions if we see a daily close below 1.1450.

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Traders should watch the range, stay patient, and control emotions before key events.

Before big events like the FOMC meeting, the market can be tricky. It often settles into a range based on previous session levels. Institutions, algorithms, and market makers typically wait for clearer signals, which can create fake breakouts or crashes that confuse newer traders. Take the S&P 500 E-mini Futures (ES) as an example. Key levels to watch are the Value Area High (VAH) at 6421.5, Point of Control (POC) at 6406.0, and Value Area Low (VAL) at 6398.0. Trading within these levels before the FOMC meeting can be beneficial. Focus on staying within the range instead of guessing breakout directions.

Avoid Common Trading Mistakes

Many traders mistakenly think a price movement signals a breakout. Overtrading can lead to hefty losses. It’s vital to spot these traps and stay disciplined. Instead of trying to capture the entire range, aim for a substantial portion of the move, then step back. Don’t force trades—be patient for clear entries at range extremes. Managing your positions well and taking reasonable profits without being greedy is crucial. After the FOMC meeting, market movements can change quickly, so concentrate on setups leading up to the event. With the FOMC announcement happening later today, the market is tightening up as we anticipated. Big players are biding their time, resulting in the S&P 500 E-mini futures being confined to a narrow range for the last few sessions. This isn’t the moment to chase drastic movements; instead, play within the established boundaries. This uncertainty makes sense. Recent data shows the Fed should be cautious. The June 2025 CPI report revealed inflation stubbornly above target at 3.1%. Meanwhile, the latest jobs report hints at a cooling labor market. This mixed information has traders anxious, waiting for any signal on future policies from the Fed’s statement.

Strategic Trading Approach

For today’s session, the S&P 500 futures remain within yesterday’s value area, roughly between 6398.0 and 6421.5. Our strategy is to trade around the edges of this range, avoiding bets on a breakout before the news. Watch for price failures at the highs or support at the lows, then expect a move back toward the center. We’ve seen similar patterns leading up to important meetings in 2023 and 2024. Often, markets make sharp, emotional moves that seem to start a new trend, only to reverse violently when the weaker traders get caught. History indicates that these pre-event rallies or dips are typically traps meant for impatient traders. The biggest mistake right now is assuming that a push to 6421.5 indicates a real breakout. Market makers are likely to absorb that buying interest before driving prices down again. Overtrading in this volatile environment is the quickest route to losing money before the main event even occurs. Instead, focus on capturing a solid piece of the intraday movement. You don’t have to ride a trade from low to high to have a successful day. Taking a clean profit near the range’s middle and stepping aside is a wise move. While the market feels steady, implied volatility in options suggests otherwise. The VIX has been low at about 15, but options expiring this week suggest a much larger move after the announcement. This indicates while things seem calm, pressure is building for a significant shift later today. Stick to your levels and wait for clear setups near the range edges. Use smaller position sizes to protect your capital from sudden spikes before the announcement. If you miss an entry, let it go; opportunities will likely arise in this environment. Remember, the entire market dynamics will change once the FOMC statement is released. Current levels and ranges may become irrelevant within minutes. The game we are playing now wraps up this afternoon, so trade it for what it is—a temporary, range-bound opportunity. Create your live VT Markets account and start trading now.

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French finance minister criticizes EU negotiations, claims UK’s deal needs improvement

France’s finance minister believes the EU could have been more assertive in trade negotiations. Some say the UK didn’t secure a better deal than the EU. France is critical of the trade agreement. President Macron pointed out that the EU’s tariff deal with the US appears unbalanced. While he sees some positives, he expects further talks on the EU-US tariff plans.

Need for Greater European Sovereignty

President Macron highlights the urgency for Europe to enhance its sovereignty. He stressed that discussions about the EU-US trade deal are ongoing and the importance of appearing strong. There are clear signs that trade relations between the EU, US, and UK remain unsettled, indicating a time of uncertainty and market instability in Europe. The call for European “sovereignty” suggests a more aggressive approach, which could affect trade and investment flow. This situation may weaken the Euro against the US dollar. We recall that the EUR/USD rate fell over 2% after protectionist comments from the US in late 2024. Recent data from the German ZEW Economic Sentiment survey shows a drop in confidence, linked to renewed trade tensions with the US.

Implications for Equity Traders

For equity traders, this raises potential risks for major European indices such as the Euro Stoxx 50. Key sectors that rely on exports, like German car manufacturers and French aerospace, could be hit hard by new tariffs. German factory orders for June 2025 were lower than expected, as manufacturers pointed to trade uncertainties. This is a clear signal to consider buying volatility as a safeguard. The VSTOXX, Europe’s main volatility index, is near historic lows, making long volatility positions affordable before any political changes. A formal move by the EU to renegotiate could lead to sharp volatility spikes, similar to those seen during the 2018 steel tariff disputes. The renewed criticism of the UK trade deal adds pressure to the EUR/GBP exchange rate. Official data from Q2 2025 showed that UK-EU trade volumes dropped 6% compared to pre-Brexit levels, and this rhetoric hints at new tensions. In this landscape, options that profit from currency swings between the two could be a smart strategy. Create your live VT Markets account and start trading now.

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In the European session, GBP is trading around 1.3350 as it waits for the Fed’s policy announcement later.

Pound Sterling is trading carefully around 1.3350 against the US Dollar as markets await the Federal Reserve’s monetary policy update. The US Dollar Index remains near its monthly high of 99.00, showing the Dollar’s strength against major currencies. According to UOB Group, the Pound is likely to stay in a range between 1.3315 and 1.3385. Analysts predict potential long-term weakness for the Pound, with a target of 1.3300.

Pound Versus Dollar

The GBP/USD pair has slightly increased, trading around 1.3360, thanks to a weaker US Dollar. This comes after four days of losses and before the expected interest rate decision from the Federal Reserve. The EUR/USD has dipped below 1.1500 following strong US GDP and employment data, boosting the Dollar. Meanwhile, GBP/USD fell below 1.3300 during the day due to the same positive US economic reports. Gold prices are nearing $3,300 as US Treasury yields rise, influenced by strong US economic data. The Bank of Canada plans to keep interest rates steady amid ongoing tariff uncertainties, helping the Canadian Dollar remain strong against the US Dollar.

Fed Decision and Market Strategy

With Pound Sterling around 1.3350, it is in a narrow range as all eyes are on the Federal Reserve. This lull is likely temporary. We expect increased volatility after the announcement. Given the Dollar Index’s high of 99.00, the Pound may be heading downwards. We suggest buying put options on GBP/USD, aiming for a drop below 1.3300 in the coming weeks. Looking back to the major declines in 2022 when the Fed was tightening aggressively, there is clear evidence of weakness for the Pound during similar times. Recent data from July 2025 indicates UK inflation remains high at 4.5%, negatively impacting the Pound’s long-term outlook and supporting our bearish stance. The Euro has also weakened significantly, dropping below the important 1.1500 level due to strong US economic data. Recent US GDP stats for Q2 2025 showed an annualized growth of 2.8%, surprising analysts and increasing demand for the Dollar. This creates a favorable condition for selling EUR/USD futures or buying puts, as a hawkish Fed could push it down to 1.1400. Gold prices are testing a record near $3,300 an ounce, even with rising US Treasury yields. This strength seems more influenced by ongoing geopolitical risks rather than fundamentals, creating a fragile situation at these high levels. If the Fed hints at maintaining higher rates for longer, we might see a sharp correction, making put options on gold a smart hedge against a stronger Dollar. Implied volatility is increasing ahead of the Fed’s decision, which is common before major economic announcements. We can take advantage of this by using strategies like straddles on GBP/USD to profit from significant price movements in either direction. After the announcement, we anticipate lower volatility, which could provide a chance to profit by selling options. Create your live VT Markets account and start trading now.

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