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AUD/USD rises to test a key trend line and resistance levels for November 2024
The AUDUSD has been rising, hitting a new daily high and gaining 0.27%. Initially, the pair was just slightly stronger but has climbed to 0.6685, where it encounters a key trend line.
This level aligns with the November 2024 highs between 0.6684 and 0.6694, creating a narrow resistance zone. If the pair pushes through this area, it could gain more upward momentum and strengthen the bullish outlook.
EURUSD hits new highs, currently up 0.84%, with strong bullish momentum and support levels
The EURUSD continues to rise, hitting a peak of 1.1860, which is a 0.84% increase for the day. The price has now surpassed last year’s high of 1.1829, reached in July, making this the highest point since September 2021.
With this upward momentum, the next target is the double swing highs from August 2021, which is around 1.1909, just about 50 pips away. The previous high of 1.1829 now acts as immediate support, while a stronger support level is at 1.1788 from the July 24 high.
Potential Risks and Market Reactions
If the pair drops below these support levels, it may disappoint buyers, leading to profit-taking or new selling pressure. Meanwhile, USDJPY has fallen by 0.67%, and USDCHF, the weakest performer, dropped 0.99% to its lowest level since 2011 at 0.78714. The AUDUSD has also reached new highs, testing 2024 trend lines near 0.6687, with recent highs at 0.6684 and 0.6694. Given the breakout in EURUSD, there is a clear chance to bet on more upward movement in the coming weeks. Buying call options with a strike price near 1.1909 seems like a good strategy, especially for contracts that expire in October 2025. The momentum is robust, with the pair at its highest since September 2021. This rise is supported by a general weakness in the US dollar, which appears linked to recent economic data. Last week, the US CPI report for August showed an increase of 2.8%, falling short of forecasts and fueling speculation that the Federal Reserve will keep rates steady through the end of the year. This is in contrast to the European Central Bank, which has indicated it is not in a hurry to cut rates, creating a favorable situation for the euro.Risk Management and Market Opportunities
To manage risk, we can use the old resistance level at 1.1829 as a key point. If the price drops below this, it would suggest a failed breakout, making it wise to consider selling our calls or buying protective puts. Historically, failed breakouts can lead to swift reversals as disappointed buyers exit their positions. The dollar’s weakness is evident, with the USDCHF pair dropping to its lowest level since the major currency interventions of 2011. This underscores strong selling pressure on the dollar and indicates we should consider buying put options on USDJPY and USDCHF. The breakdown in the Swiss franc pair highlights a significant, long-term shift away from the dollar. We are also monitoring AUDUSD, which is testing a key trend line and highs from 2024. A sustained break above the 0.6700 level would further confirm the weak dollar trend and open the door for additional gains. This broad decline in the dollar represents a major change from the strong-dollar environment seen during the aggressive rate hikes of 2022 and 2023. Create your live VT Markets account and start trading now.European indices decline as Germany’s Dax leads the drop amid negative trends in the US market
European stock markets dropped sharply today. Germany’s DAX fell by 1.79%, its worst performance since September 2nd. France’s CAC ended a six-day winning streak, declining by 1%.
The main index stats are:
– Germany’s DAX: -1.7%
– France’s CAC: -1.0%
– UK’s FTSE 100: -0.88%
– Spain’s Ibex: -1.51%
– Italy’s FTSE MIB: -1.28%
As European markets closed, US indices also showed losses.
US Market Decline
In the US, the Dow Jones dropped by 121 points, a decrease of 0.26%. The S&P index fell by 11.32 points, or 0.17%, and the Nasdaq index declined by 37.38 points, also a drop of 0.17%. US yields also decreased: the 2-year yield is now at 3.517%, the 5-year yield at 3.584%, the 10-year at 4.026%, and the 30-year at 4.645%. These are drops of 2.1, 1.5, 0.8, and 0.9 basis points, respectively. With European markets showing their worst results in weeks, traders are clearly cautious. This is largely due to the German ZEW Economic Sentiment survey, which reported a significant decline, raising concerns about a possible recession. The drop in US Treasury yields further indicates that investors are seeking safer options, showing this isn’t just a European issue. This rise in fear is making volatility a key focus for derivative traders right now. The VSTOXX, which tracks Euro Stoxx 50 volatility, jumped more than 15% today. Traders might want to consider buying protection, such as outright put options on the DAX or S&P 500, or taking long positions in volatility ETNs, especially if this trend continues.Hedging Strategies
For those with existing long equity positions, hedging is becoming essential. We saw similar market patterns in late 2022 and early 2023 when fears of central bank tightening led to sudden downturns. A smart approach would be to buy put spreads on major indices, which can shield against significant drops over the coming weeks, while minimizing upfront costs. Attention is now on the upcoming central bank meetings, particularly since the ECB will meet next week. Options pricing reflects growing uncertainty, as the likelihood of a hawkish stance on interest rates has increased significantly in the last day. The current market sell-off might be preemptively positioning itself against any tough messages from policymakers still facing high inflation. Create your live VT Markets account and start trading now.The USDCHF tests 2025 lows, showing initial buying interest and the potential for a rebound.
The USDCHF currency pair recently tested an important level at 0.78714, reaching a low of 0.7874 before bouncing back to 0.7885. This level is crucial because if it breaks below, it will be the lowest point since 2011, creating a new yearly low.
To keep the positive sentiment, buyers need the price to stay above 0.78714. If it remains above this point, there is a chance for a rebound. However, if it dips below, it will reinforce the downward trend and indicate a further price decline.
Potential For Upward Momentum
For an upward movement, breaking above the July 3 low would be a good sign. Sellers are keeping an eye on the range between 0.79104 and 0.79209. If the price goes above this area, it could lead to short covering, shifting momentum in favor of buyers. We are observing the USDCHF test a key support level at 0.78714, which has held since early July 2025. A break here would be significant, taking us back to prices not seen since the Swiss National Bank actively intervened in the currency market over ten years ago. This pressure on the dollar follows last month’s US jobs report, which showed hiring in August 2025 was slightly lower than expected. For traders looking for further downside, buying put options with a strike price below 0.7870 is a straightforward strategy with clear risk. This bearish outlook is backed by the Swiss National Bank’s recent hawkish stance, as it is focused on controlling inflation, which recent data shows is still around 2.1%. Breaking the July low could easily push the pair toward the 0.7800 psychological level. On the flip side, if we think this long-term support will hold, buying call options is a direct way to take advantage of a potential rebound. The key trigger for a reversal would be a move back above the 0.79209 resistance zone. This would indicate that the dollar’s weakness might be overstretched, causing those with short positions to buy back, which could fuel the rally.Trading Strategy Approaches
Since the pair is at such a crucial point, a sharp move in either direction is likely in the coming weeks. Traders unsure about which way it will go but confident in rising volatility can use a long straddle strategy. This involves buying both a put and a call option. This positioning profits from a significant price movement, effectively betting on a breakout, regardless of the direction. Create your live VT Markets account and start trading now.GDP growth estimate for the third quarter rises to 3.4% due to recent data
The Atlanta Fed GDPNow model has updated its forecast for third-quarter GDP growth in 2025 to 3.4% as of September 16, an increase from 3.1% on September 10. This adjustment is based on new information from the US Census Bureau, US Bureau of Labor Statistics, and Treasury’s Bureau of the Fiscal Service.
The expected growth for third-quarter personal consumption spending has risen from 2.3% to 2.7%. Similarly, the growth for real gross private domestic investment has increased from 6.2% to 6.9%. However, the impact of net exports on third-quarter GDP growth has fallen from 0.23 percentage points to 0.08 percentage points.
Upcoming GDPNow Update
The next update from the GDPNow model will be on Wednesday, September 17. You can find more details on the release schedule in the “Release Dates” section. The revised growth estimate of 3.4% shows that the economy is performing better than expected. This strength is driven by solid consumer spending and business investment. As a result, the Federal Reserve is less likely to lower interest rates anytime soon. This outlook suggests we should prepare for interest rates to remain “higher for longer.” We should consider options and futures that thrive in steady or rising rate environments, such as puts on Treasury bond ETFs. After the hawkish shift in late 2023, strong economic data also pushed back expectations for rate cuts, causing significant changes in fixed-income markets.Implications of Economic Indicators
The recent August Consumer Price Index shows inflation steady at 3.6%, reinforcing a hawkish stance from the Federal Reserve. The strong growth in consumption also indicates continued strength in the S&P 500. We might use bull call spreads on major indices to take advantage of this potential upside while managing risk. The August jobs report added a solid 210,000 jobs, further supporting the idea of a strong consumer who continues to spend. This makes options on consumer discretionary and industrial sector ETFs especially appealing. However, with policy uncertainty rising, buying VIX call options could serve as a good hedge against unexpected moves from the central bank. Lastly, a stronger US economy along with a firm Federal Reserve usually leads to a stronger US dollar. This sets the US apart from other central banks, some of which have started easing. It creates opportunities in currency derivatives, and we’re looking at strategies that favor the dollar against currencies with softer monetary policies. Create your live VT Markets account and start trading now.The USDJPY nears an important support level at 146.55, signaling potential for further declines.
The USDJPY is moving downward and is nearly at the bottom of an important swing area, which ranges from 146.55 to 146.83. This area has seen multiple swing lows since early August, making it a key support zone for traders.
If the rate falls below 146.55, it may drop to last week’s low around 146.30, followed by the August low of 146.206. Below these levels, the 100-day moving average sits at 146.14, emphasizing the importance of this support area. Staying above this range would keep buyers active, while a strong break could give sellers the advantage.
Possible Outcomes from the Support Test
We are closely watching the USDJPY as it tests the vital 146.55 support level. This comes after the US reported that core inflation for August 2025 dropped to 2.9%, just below expectations, which is putting some pressure on the dollar. A break of this level may indicate a bigger movement, especially as the Federal Reserve considers economic data closely. For traders expecting a drop below 146.55, buying USDJPY put options with strike prices around 146.30 or even 146.00 would be a straightforward way to play the potential decline. Using put spreads, such as buying a 146.50 put and selling a 145.50 put, can help limit risk and lower initial costs. This strategy allows targeting the technical levels mentioned, including the 100-day moving average. We recall the significant currency volatility in 2022 and 2023, prompted by differing central bank policies that led to sharp trends. If this support level breaks decisively, it could swiftly unravel long dollar positions, akin to the rapid pullbacks seen in late 2023. Derivatives are effective tools for capturing such quick changes.Strategies for Trading the USDJPY Support
On the other hand, if we think the support zone between 146.55 and 146.83 will hold, selling out-of-the-money put spreads with a short strike below 146.00 may be a smart move. This strategy collects a premium and will be profitable if the pair stays above the support zone until the options expire. The defined risk of a spread is wise given the current uncertain economic conditions. It’s also crucial to keep an eye on the options market’s implied volatility, which is currently at a moderate 8.2% for 1-month contracts. A clear break of support would likely increase volatility, boosting the value of long option positions. We should remain alert to any comments from Japanese officials, as they often speak up if the yen appreciates too quickly. In the coming weeks, the immediate response to the 146.55 level is crucial. We can use short-term options to prepare for either a sharp drop or a strong rebound from this key area. The outcome of the next Bank of Japan meeting will be significant, as any changes in their forward guidance could quickly drive the next major movement in the currency pair. Create your live VT Markets account and start trading now.Gold hits record high above $3700 driven by strong US economic data and expectations
Gold prices have crossed the $3700 level for the first time. This rise is linked to strong economic data from the US and expectations regarding the Federal Reserve’s policy decisions. Retail sales and import prices were better than expected, while a slight weakness in the labor market suggests a possible 25 basis point rate cut, marking the first reduction since December. Easing measures may continue into 2026.
From a technical viewpoint, gold’s price lows in August found support near the 100-day moving average, creating a positive outlook. The $3452–$3500 range was broken on September 2, then retested and confirmed the breakout. After this, gold prices stabilized from last week’s highs, resetting momentum. This pause was helpful, as buyers returned, pushing prices to new record levels.
The Upward Trend
The upward trend still holds strong today, indicating potential for more gains. Meanwhile, the US dollar is falling against major currency pairs, with the biggest drop against USDCHF at -0.84%. The dollar is also slightly down versus AUD and NZD. The market is anticipating about a 90% chance of a 25 basis point rate cut tomorrow, which would be the first since December 2024. This expectation follows a weaker August jobs report, which revealed a gain of just 85,000 jobs. Such labor market softness provides the Federal Reserve with the justification needed to begin easing. With gold reaching new all-time highs above $3700, buying call options seems like a smart move to seize further gains. The recent consolidation has allowed momentum to reset, and this breakout appears strong. Traders might want to consider options that expire in October or November to provide enough time for the trade to develop. We’ve also observed that implied volatility in gold options has risen to 18.5, resulting in higher costs for naked long calls. A more defined strategy could involve bull call spreads, which could profit from gradual increases while limiting upfront costs.Opportunities In Futures Markets
The overall weakness of the US dollar offers another opportunity, especially in the futures markets. We are considering shorting USD futures contracts, as the expected Fed cut contrasts with actions from other central banks. The significant drop in USDCHF exemplifies this, particularly after the Swiss National Bank indicated it would keep rates steady last week. Reflecting on the easing cycle that began in mid-2019, gold rose sharply as the Fed cut rates. We anticipate a similar scenario now, where falling real yields should support precious metals. History indicates that this initial movement could maintain its momentum well into 2026. Create your live VT Markets account and start trading now.EURUSD surges above 1.18289, hitting levels not seen since September 2021
The Rising Momentum of EURUSD
The EURUSD has climbed higher, reaching a new session peak and going beyond the July 1 high of 1.18289 for this year. This rise marks its highest point since September 2021, indicating strong upward momentum.
On the daily chart, this breakthrough opens the door to a major resistance zone around 1.1909. This zone includes previous highs, particularly 1.1909 from September 3, 2021, and 1.19087 from July 30, 2021. Since these levels are close together, traders are likely to watch this area for future price trends.
If this upward trend continues, a clear break above 1.1909 could target further retracement levels, keeping the positive trend as the pair moved through previous resistances this month. On the other hand, support is forming at the 1.18289 breakout level, where buyers are expected to step in during potential price drops. Additional support can be found at 1.1788, the high from July 24.
Opportunities in Options
With strong upward momentum pushing us past the July 2025 peak, we see a chance to buy call options. A move toward the next key resistance level around 1.1909 looks increasingly likely in the upcoming weeks. This level is important because it’s close to the highs from summer 2021.
This strong technical position is backed by good economic news, as the latest German ZEW Economic Sentiment for September came in higher than expected at 15.2. Additionally, recent comments from the ECB indicate a growing inclination to tighten monetary policy to fight inflation, currently at 2.8% in the Eurozone. This differing approach from the Federal Reserve is boosting the Euro’s value.
For those with a more cautious strategy, selling out-of-the-money put options with a strike price near the new support level of 1.18289 could be wise. This method allows traders to earn premiums while betting that the old resistance will hold during any potential price dips. Implied volatility has increased slightly with this breakout, making these premiums more appealing.
The US Dollar Outlook
We’re also keeping an eye on the dollar. Last month’s US jobs report was weaker than expected, with only 150,000 jobs added. This, along with a more cautious tone in last week’s Federal Reserve minutes, suggests that the dollar may keep weakening against the euro. The difference in policies between the central banks is becoming a key market driver.
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US business inventories increased by 0.2% in July, meeting expectations alongside a stable sales ratio.
US business inventories for July showed a growth of 0.2%, matching what analysts had expected. The previous month also recorded a similar increase of 0.2%.
Retail inventories, not including autos, rose by 0.1%, consistent with last month’s figures. At the end of July, the total business inventories-to-sales ratio, adjusted for seasonal changes, was 1.37.
Business Inventory Data Shows Stability
This is a decrease from a ratio of 1.40 in July 2024. The July data on business inventories confirms a stable economy, with the 0.2% growth meeting predictions. A key point is the inventory-to-sales ratio, which dropped to 1.37 from 1.40 in July 2024. This indicates that demand is keeping pace with supply, and businesses are effectively managing their inventory. This report suggests that the Federal Reserve will remain cautious, as it does not indicate an overheating or slowing economy. The recent core inflation rate held steady at 2.5%, and the stable inventory figures give policymakers little reason to lower interest rates soon. We expect them to keep the federal funds rate steady for the rest of the year. As a result, we should expect implied volatility to stay low in the coming weeks. The CBOE Volatility Index (VIX) has been around a low of 14, and this steady economic data is unlikely to cause market uncertainty. This environment is favorable for strategies that benefit from low volatility, like selling options.Retail Inventory Insights
The 0.1% increase in retail inventories, excluding autos, indicates steady, if not remarkable, consumer health. We can expect some stability in consumer-focused ETFs like the XLY and XLP, opening up possibilities for options strategies like selling iron condors or strangles with October and November expirations. Looking back, current inventory levels are in sharp contrast to the excessive stock we had in 2023 and early 2024, which was harmed by supply chain disruptions that affected corporate profits. The improved efficiency now suggests better margin management for companies, indicating a stable market rather than a rapidly changing one. Given this context, focusing on theta-decay strategies for broad market indices like the SPX is wise. With the market unlikely to move dramatically, selling covered calls against long-term holdings or cash-secured puts during dips may provide income. The goal is to take advantage of the market’s expectation of continued stability. Create your live VT Markets account and start trading now.The housing market index reached 32, below predictions, while sales expectations increased.
The National Association of Home Builders (NAHB) reported the housing market index for September at 32, which is slightly below the expected 33.
Housing starts for September stayed the same as last month at 32. The current sales conditions also remained stable at 34, reflecting no changes.
