Major U.S. stock indices had a mixed closing, with earlier gains diminishing even after a tariff agreement between the U.S. and EU. The S&P 500 remained nearly the same, while the Dow Jones Industrial Average mostly recorded losses during the session.
This upcoming week is full of important economic events, including the FOMC interest rate decision, the U.S. jobs report, and the release of the second-quarter GDP. Investors are staying cautious due to ongoing uncertainty about how the new tariff might affect inflation. Additionally, the earnings season ramps up, with reports expected from Amazon, Apple, Meta, and Microsoft, as well as rate announcements from the Bank of Canada and Bank of Japan.
Market Closing Figures
Here are the final figures:
– Dow: down 64.36 points (-0.14%) at 44,837.56
– S&P 500: up 1.13 points (+0.02%) at 6,389.77
– NASDAQ: up 70.27 points (+0.33%) at 21,178.58
– Russell 2000: down 4.34 points (-0.19%) at 2,256.72
Notable stock performances included Super Micro Computer, which rose 10.24% due to excitement around AI and data centers. AMD and ASML also gained after the U.S.-EU trade deal on semiconductors. Nike’s stock improved by 3.89% following a JPMorgan upgrade, and Exxon Mobil jumped 2.62% as crude prices rallied due to tighter supply and sanctions on Russia.
With the Federal Reserve’s decision and the U.S. jobs report coming this week, we anticipate significant market fluctuations. The CBOE Volatility Index (VIX) has remained low at around 12, suggesting that options are currently inexpensive. This presents a good chance to prepare for an increase in volatility, perhaps by using straddles on broad market indices.
Focus on Tech Giants
We are keeping an eye on major tech companies reporting this week, including those behind Windows and the iPhone. Historically, these large tech stocks have averaged about a 5% price change after earnings reports over the last eight quarters, presenting clear opportunities for investors who can predict the direction. We will look to capitalize on expected price gaps around these earnings announcements.
The semiconductor sector is also in focus, having gained from the recent trade agreement. The VanEck Semiconductor ETF (SMH) is up over 50% this year, showing strong momentum but also raising the risk of a potential pullback. We think using call spreads is a smart way to benefit from further upside in companies like the one run by Su while limiting our maximum risk.
Market caution, combined with record cash in money market funds exceeding $6.1 trillion, creates a “coiled spring” effect. We anticipate that a “fear of missing out” could lead to a sharp rise if this week’s economic data turns out positive. With this in mind, we are positioning ourselves with out-of-the-money call options on the NASDAQ 100, which provide leveraged upside with limited capital at risk.
Create your live VT Markets account and start trading now.
Silver is steady around $38.00 in Monday’s European session, influenced by a positive shift in global risk sentiment. Last Friday, the price dropped below $38.70, which canceled a bullish cup and handle pattern on the 4-hour chart.
Technical indicators show that bearish momentum is strong. The RSI sits near oversold levels at 32.00, and the ADX is at 36.86, indicating potential for further declines.
Support and Resistance Levels
The spot price is below the 50-period EMA at $38.49 and is testing the 100-period EMA near $38.03. Immediate support is at $38.00, with the next level at $37.50.
Looking at the bigger picture, Silver remains bullish, staying within a rising price channel since April. It is above the 21-day EMA at $37.78 and the 50-day EMA at $36.45, which shows medium-term buying interest.
If the price falls below $37.50, it could drop further to the $36.40-$36.00 range. On the other hand, if it rises above $38.50, bullish momentum could return, possibly retesting $39.53.
Silver prices are affected by geopolitical events, industrial demand, and the strength of the US Dollar. Similar to Gold, Silver is often seen as a safe-haven asset, and its prices usually move in line with Gold.
Trading Recommendations and Strategies
Given the current bearish momentum, traders should be cautious of further declines. This trend is supported by a strong US Dollar, as the DXY index has recently climbed above 105.5, which typically pressures commodity prices. The $38.00 level will be crucial to watch in the coming days.
If you expect further declines, starting short positions or buying put options could be a good strategy if the price fails to hold its current level. A break below the $37.50 support would signal this approach, with targets around $36.40 to $36.00. Historically, when short-term patterns fail, a quick retest of lower support zones often occurs.
Despite the current dip, the rising price channel from April shows underlying strength, supported by solid industrial demand. The Silver Institute forecasts record industrial use in 2024, driven mainly by solar panel manufacturing. This suggests that the current pullback might be a buying opportunity for medium-term traders.
Traders looking for upside should wait for a confirmed move back above $38.50 before going long or buying call options. This would indicate a return of bullish momentum and suggest that immediate selling pressure has eased. Recapturing this level could open the door to retesting the recent high close to $39.53.
The contrast between short-term bearish signals and medium-term bullish fundamentals hints at increased volatility. In this environment, options strategies like straddles could be beneficial, as Silver typically shows larger price swings than Gold.
We are also monitoring Silver’s relationship with Gold, as Silver’s price often mimics Gold’s movements. Recently, the gold-to-silver ratio traded around 78, above its 20-year average. This suggests that Silver may be undervalued and has potential to outperform in a rally of precious metals.
Create your live VT Markets account and start trading now.
Gold is trading in a narrow range due to economic data, easing trade tensions, and a weak US Dollar. Currently, Gold is priced around $3,310 per ounce, down from a high of $3,345.
A new US–EU trade deal has reduced tariff risks by lowering most EU goods tariffs to 15%. This agreement enhances US access to EU markets in digital services, agriculture, and clean energy, similar to the recent US–Japan trade deal.
Impact of a Strengthening US Dollar
The US Dollar has strengthened because of new trade deals before the FOMC meeting, leading to less demand for safe havens like Gold. The agreement promotes cooperation on key minerals, allowing EU exporters to benefit from IRA incentives in the US.
Gold continues to trade close to $3,340 as optimism about global trade stability grows, decreasing safe-haven demand. A strong US labor market eases pressure on the Federal Reserve to cut interest rates, supporting the Dollar and resulting in higher yields, which typically is negative for Gold.
The FedWatch Tool shows a 59.5% chance of a rate cut in September, with a 38.9% chance of rates remaining the same. Ongoing trade talks with China are crucial; failure could lead to increased tariffs and inflation.
Gold’s technical chart displays a symmetrical triangle pattern, indicating potential breakout opportunities. Immediate support is at $3,350, while resistance is around the 23.6% Fibonacci retracement level near $3,372, highlighting important price points for future movements.
Though historically a store of value, Gold serves as a hedge against inflation and falling currencies. Its inverse relationship with the US Dollar and US Treasuries means it often rises when the Dollar weakens and during global instability.
Trends in Central Bank Purchasing
Central banks have become major Gold buyers, adding 1,136 tonnes worth about $70 billion to their reserves in 2022. This marks the highest yearly purchase since records began, showing Gold’s ongoing role in economic strategies.
Gold is currently trading around $2,330 per ounce, caught between mixed economic signals and a weak US Dollar. Recent strength in the Dollar, aided by the US-EU trade agreement, is limiting potential gains. This has reduced interest in Gold as a safe haven for now.
A strong US labor market added an unexpected 272,000 jobs in May, lowering the urgency for the central bank to cut interest rates. Consequently, the likelihood of a September rate cut has dropped below 50%, according to the latest FedWatch data. This supportive outlook for higher interest rates traditionally affects Gold negatively.
From a technical perspective, we are observing a consolidation pattern that hints at an upcoming significant move. Immediate support for Gold is near $2,300, and breaking below this level may lead to further declines. Resistance is forming around $2,375, which is crucial to break to maintain the prior uptrend.
Despite short-term pressures, strong demand from global central banks provides a solid foundation for Gold prices. These institutions added 290 tonnes to their reserves in the first quarter of 2024, continuing a trend of historic buying. This strategic accumulation highlights Gold’s role as a key reserve asset against currency depreciation.
Given these mixed signals, traders should consider strategies that could benefit from potential volatility. Buying straddles or strangles allows traders to profit from significant price moves in either direction, which seems likely given the current tension between negative economic data and strong institutional demand. This approach protects against the uncertainty of what may drive the next major trend.
Create your live VT Markets account and start trading now.
The White House will release a crypto policy report on July 30. This report, which was originally expected on July 22, is now confirmed. It comes from the President’s Working Group on Digital Assets after a 180-day review following an executive order from January.
Strategic Bitcoin Reserve
A key part of the report is the Strategic Bitcoin Reserve, a proposed stockpile of Bitcoin held by the U.S. government. The report is expected to disclose how much Bitcoin the government owns, primarily gained through legal seizures. It will likely outline the reserve’s role in the country’s digital asset strategy.
The report may also suggest a federal regulatory framework for the issuance, management, and use of digital assets in financial markets. The crypto industry is watching closely, as these recommendations could significantly shape future policies and market structures.
The report’s release on July 30 is a big event, likely leading to increased market volatility. Implied volatility for Bitcoin options set to expire in early August is expected to rise as traders react to the news. This scenario is favorable for strategies that benefit from large price movements, such as buying straddles or strangles.
The Strategic Reserve proposal is crucial, especially since government wallets already contain over 214,000 BTC from seizures. If the policy establishes this as a long-term holding instead of something to sell, it would reduce future selling pressure—an encouraging sign for the market. We could see a spike in call option buying and more long futures positions if there are leaks suggesting this outcome.
Government And Regulatory Actions
We’ve seen similar reactions to significant government and regulatory actions before. When the spot Bitcoin ETFs were approved in January, the market experienced a brief sell-off followed by a sustained rally, since the news was largely anticipated. A “sell-the-news” reaction could happen again, so traders should be cautious of initial market shocks.
In addition to the stockpile, the proposed federal regulatory framework carries its own risks. Vague or overly strict regulations could unsettle the market, possibly causing a sharp downturn. To prepare for this, it may be wise to hedge long positions by buying protective put options.
As the date approaches, we will monitor derivatives data such as funding rates on perpetual swaps and open interest on CME. A significant rise in open interest would suggest that institutional investors anticipate a major price movement. The clarity sought since the last administration’s executive order is nearing, and we expect to see confidence first in the derivatives markets.
Create your live VT Markets account and start trading now.
The economic calendar for Asia on Tuesday, July 29, 2025, is quite empty, featuring only a few data points and events. The UK’s BRC inflation indicator for shop prices in July is expected to have minimal effect on the market.
Japan’s Ministry of Finance will auction 2-year Japanese Government Bonds (JGBs) at 2335 GMT, which is 1955 US Eastern Time. This auction may attract bond traders, as yields in Japan have settled for now.
Opportunity In Sparse Event Schedule
With the light calendar, as noted by Sheridan, we see this as a chance rather than a time to tune out. Fewer scheduled events often lead to lower implied volatility, making options contracts more affordable. This is a great time for us to position ourselves for future market movements at a bargain before the next big event.
The phrase “for now” regarding the stabilization of Japanese bond yields is essential for derivative traders. The Bank of Japan’s gradual shift from its very loose monetary policy has created some tension. Historical data indicates that calm periods in USD/JPY frequently precede sudden market shifts. With 3-month implied volatility for this currency pair currently around 8.5%, it’s wise to buy long-dated strangles to prepare for the upcoming changes.
While the BRC report from the UK may seem minor, the broader trend of ongoing inflation and central bank reactions is still the main driver of the market. Even small reports can lead to significant market reactions if they disrupt the prevailing narrative, especially when trading volume is low. We can take advantage of this quiet time by setting up cost-effective calendar spreads on FTSE 100 options, selling cheaper front-week options while buying positions in the following month.
Market Volatility Observations
The current state of low realized volatility is reflected in major indices like the S&P 500, which has a 10-day historical volatility of under 10%. This situation is unusual and usually doesn’t last long. Periods of low activity have often preceded sharp market corrections, as seen in late 2019 before the crash in 2020. Therefore, we view this as an ideal time to build a portfolio of inexpensive out-of-the-money puts on major indices or to purchase VIX calls as a hedge.
Create your live VT Markets account and start trading now.
As the Federal Reserve (Fed) keeps interest rates between 4.25% and 4.5%, it’s important to understand how this affects Individual Retirement Accounts (IRAs). These accounts, including Traditional and Roth IRAs, benefit from tax advantages and are influenced by the Fed’s monetary policies.
When interest rates rise, bond fund values in IRAs may drop in the short term. However, higher-rate bonds can increase income over time. On the flip side, when rates fall, stocks might do better, as companies can borrow money at lower costs, which can improve equity-focused IRA portfolios.
Market predictions suggest the Fed may lower rates in September due to stable inflation and a slowing economy. For IRA holders with bonds, it’s essential to pay attention to how interest rates impact asset values. Falling rates could make bonds more valuable, so it may be wise to include high-yield bonds or extend bond durations in your strategy.
It’s also crucial to have a diverse mix of IRA investments, including stocks, bonds, and other assets. This planning is especially important for those close to the age for Required Minimum Distributions (RMDs), as market conditions can influence withdrawals. Unlike 401(k) plans, IRAs allow for a wider range of investment options, enabling more personalized financial strategies. However, market ups and downs can pose risks to IRA portfolios, so diversification is a smart way to protect investments.
Currently, the market expects a significant possibility of a rate cut by September. This view is supported by the CME FedWatch tool, which shows a greater than 60% chance of a rate cut. This anticipation is crucial for the market, meaning we should focus on the volatility that may come with this policy change. Our strategies should be ready to take advantage of the market’s reactions, whether the Fed meets expectations or surprises everyone.
With the CBOE Volatility Index (VIX) around a low 13, we think that the current option premiums may not fully reflect potential sharp price movements. This calmness, in a time of slower economic growth and a Consumer Price Index reading of 3.3%, presents a chance for us. We can set up positions using options on major indices to benefit from an expected rise in volatility as the meeting date approaches.
Discussions about bond sensitivity can also be traded through interest rate futures and options. Historically, the first rate cut in a cycle often leads to a rally in government debt, as yields drop in anticipation. Therefore, we are considering long positions in Treasury note futures to profit from this expected decline in yields.
In this environment, we need a strategy that can benefit from increased market fluctuations while managing risk. Past experiences show that the time before a major policy change tends to be more volatile than afterward. Thus, we won’t wait for the official announcement. Using strategies like straddles or strangles on key stock indices can help us profit from significant price movements, no matter which direction they take.
While diversification is key, we also want to diversify our derivative strategies. We are looking at currency markets too, as a policy change will likely impact the U.S. dollar directly. A rate cut could weaken the dollar, creating clear opportunities in currency futures and options against the Euro or Yen.
Market Volatility Trends
The US Dollar (USD) is bouncing back thanks to reduced global trade tensions and expectations that the Federal Reserve will keep interest rates steady. New trade deals, particularly between the US and EU, are boosting the USD as the August 1 tariff deadline approaches, making the market cautious.
The US Dollar Index (DXY), which measures the USD against six major currencies, has risen for three consecutive days, reaching about 98.60—the highest level in a week. The recent US-EU trade deal includes a 15% tariff on certain EU imports but provides exemptions in key sectors. Additionally, the EU has committed to purchasing $250 billion worth of US liquefied natural gas annually.
EU-US Energy Investment
The EU has also pledged $600 billion to invest in the US, focusing on clean energy and other vital areas. While existing tariffs on steel and aluminum continue, a quota-based system may be introduced later. Discussions between US and UK leaders echoed similar views, with tariffs remaining unchanged for the UK.
Oil prices are rising due to geopolitical tensions, making the economic situation more complex. However, trade developments are bringing optimism, as reflected by S&P 500 futures rising 0.4%. Caution still exists as we await the Federal Reserve’s decision on interest rates.
The current recovery of the dollar signals important trends for the upcoming weeks, especially with the US Dollar Index staying strong above 105. This scenario suggests that traders should position themselves for continued dollar strength against other major currencies.
Monetary Strategy and Dollar Strength
Recent data shows strong job growth, with over 272,000 jobs added in May and inflation steady at around 3.3%. This supports the idea that the central bank will remain steady. The CME FedWatch Tool indicates that there is over a 90% chance that interest rates will stay the same soon. This certainty encourages strategies that benefit from low volatility and a strong dollar.
While optimism from trade is present, we must also be cautious, as indicated by the Volatility Index (VIX) staying in the low teens. Buying call options on the dollar can offer a way to take advantage of its potential upside while keeping risks defined. This allows for a flexible response to positive market feelings without overcommitting.
Historically, times when central banks keep rates high to tackle inflation lead to lasting currency strength. We believe that selling out-of-the-money put options on the dollar could be an effective strategy, generating income from the premium collected and benefiting if the dollar remains stable or gets stronger.
High oil prices, with WTI crude recently trading above $80 a barrel, further strengthen the case against quick rate cuts. This inflationary pressure suggests that the central bank is likely to hold its current stance, which is beneficial for the currency. The announced energy purchase commitments will also maintain consistent demand for the dollar.
Create your live VT Markets account and start trading now.
Mexico’s trade balance in June was $0.595 billion, a significant improvement from the previous $-0.059 billion. This indicates a positive shift in Mexico’s economic activities.
The AUD/USD pair is in a downward trend, approaching the 0.6500 level, as the US Dollar gains strength. Meanwhile, the EUR/USD pair has faced significant losses, slipping below 1.1600 due to the Dollar’s robust performance following trade agreements.
Gold And Ethereum Prices
Gold prices have fallen to about $3,300 per troy ounce as trade confidence rises after new agreements between the US and EU. Ethereum is currently valued at $3,803, with a recent peak of $3,941, buoyed by positive movements in the digital asset market.
The Federal Reserve is under scrutiny for delaying rate cuts amid ongoing tariff uncertainties and a seemingly stable economy. There are worries the Fed may have missed its chance, especially as signs of weakness appear in the labor market.
For those trading EUR/USD, we have a list of top brokers offering competitive spreads and strong platforms. These options cater to both new and experienced traders looking to navigate the changing Forex environment.
Federal Reserve’s Market Influence
The Federal Reserve’s reluctance to cut rates is a key factor impacting the markets. Recent inflation data shows the Consumer Price Index at 3.3% for the 12 months ending May 2024, which supports the Fed’s decision and keeps the US Dollar strong. This suggests that derivative positions favoring the Dollar are appealing for now.
The differences in central bank policies make shorting the EUR/USD pair an attractive option, especially since the European Central Bank has started to ease with a recent rate cut. We also see the Australian Dollar as vulnerable due to its sensitivity to global risk and the Dollar’s strength. Therefore, buying put options for these currencies may be a wise strategy.
However, we should remain alert for signs of economic weakness, as evidenced by US job openings dropping to 8.1 million in April 2024—a three-year low. If the labor market worsens, this could lead to a quick policy reversal, weakening the Dollar and boosting safe-haven assets. In this case, call options on gold, which is currently around $2,300 per ounce, might provide effective protection against a sudden shift in monetary policy.
Mexico’s recent trade surplus highlights its economic resilience, a quality not always found in emerging markets. This strength presents an opportunity for long positions in the Mexican Peso compared to currencies facing greater challenges. We believe this could be a good relative value trade in the coming weeks.
The digital asset market is showing its own dynamics, with Ethereum displaying notable strength. Historically, cryptocurrencies have sometimes acted as a hedge during periods of uncertainty in fiat currencies, a trend we are closely observing. Therefore, we will manage crypto derivatives separately from our broader macroeconomic approach.
Create your live VT Markets account and start trading now.
Mexico’s seasonally adjusted unemployment rate dropped to 2.6% in June, down from 2.7%. This change reflects shifts in the job market.
The EUR/USD currency pair decreased to multi-day lows around 1.1630, mainly due to a strong US Dollar. The Euro is struggling after the European Central Bank’s recent decisions and a new EU-US trade agreement.
Volatility in GBP/USD Pair
The GBP/USD pair is experiencing fluctuations, trading just above 1.3400. The strength of the US Dollar affects the pair, while capital exiting the Euro is helping support the Pound Sterling.
Gold prices have fallen to about $3,320 per troy ounce. The stronger US Dollar and progress in US-EU trade talks are impacting the demand for Gold.
The US faces a deadline for a trade deal or tariffs on August 1. The Federal Reserve is likely to keep interest rates steady, and Nonfarm Payrolls are expected to stay stable.
There are concerns regarding the Federal Reserve’s delay in lowering interest rates. Ongoing tariff issues and a strong economy are influencing this decision.
Trading Strategies for EUR/USD
When trading EUR/USD, choose brokers that offer competitive spreads and quick execution. This is key for successfully navigating the changing Forex market.
The European Central Bank began its rate-cutting cycle in June 2024, moving ahead of the US Federal Reserve. This difference in policy may keep the Euro under pressure against the Dollar. Strategies that take advantage of a lower EUR/USD, like buying put options or short futures positions, should be considered.
UK inflation was 2.3% in April 2024, still above the target. As a result, the Bank of England is expected to hold interest rates steady, which could give the Pound Sterling a strength advantage over the Euro. We view the volatility in GBP/USD as a trading opportunity, possibly using straddles around important economic data releases.
Gold prices have declined from recent highs above $2,400 per ounce and are now around $2,330. The strong US Dollar and high interest rates are pressuring the price of this non-yielding metal. However, central banks worldwide added a net of 1,037 tonnes in 2023, the second highest annual total on record, which should help support prices in the long run.
The latest US Nonfarm Payrolls report showed an increase of 272,000 jobs in May, much higher than expected. This strong labor market data supports the Federal Reserve’s cautious stance on interest rate cuts. Therefore, we expect continued strength in the Dollar in the coming weeks, impacting all major asset classes.
Mexico’s low unemployment rate indicates a strong domestic economy. However, recent political events have caused significant volatility in the peso, which weakened past 18 to the dollar for the first time since 2023. Traders should exercise caution and consider using options to manage risk when speculating on this currency’s direction.
Create your live VT Markets account and start trading now.
France is urging EU nations to use the so-called “trade bazooka” against the US because it feels the trade deal is unfair.
The EU Anti-Coercion Instrument, Regulation 2023/2675, is a useful tool for the EU to identify and respond to economic pressure from outside countries.
Focus of Regulation 2023/2675
Regulation 2023/2675 concentrates on trade, investments, services, public procurement, and intellectual property rights. It ensures responses are appropriate, reasonable, and comply with international law.
With the French president pushing to use this trade weapon against the US, traders should brace for increased market volatility. His strong statements about “unfair” trade practices add new geopolitical risks. This uncertainty can lead to turbulence in cross-asset derivatives.
We should expect more fluctuations in the EUR/USD currency pair, which directly reflects this tension. Traders might think about buying straddles or strangles on this pair, allowing them to profit from big moves in either direction. Historically, just the threat of trade sanctions between these regions has led to sharp price swings.
Impact on Major Sectors and Market Volatility
The stakes are very high, with US-EU trade in goods and services exceeding $1.3 trillion in 2022. Key sectors like automotive, aerospace, and luxury goods are in the crosshairs. We recommend considering protective put options on exchange-traded funds for European automakers or the broader CAC 40 index.
This scenario mirrors the trade disputes from 2018-2019, which caused high volatility and risk aversion. During that time, implied volatility for major indices spiked even before any tariffs were introduced. We anticipate a similar pattern now, where fear of the “anti-coercion” tool being applied could shake up the markets.
The European VSTOXX volatility index, which has recently been around 13, suggests relative calm. This is an opportunity to buy call options on the index as an inexpensive hedge against a potential breakdown in trade relations. If the French president’s push gains support in the EU, this index might quickly rise.
Since this new legal tool is untested against a partner as significant as the United States, its potential use creates serious uncertainty. This could weigh more heavily on European stocks than on US stocks at first, as markets dislike uncertainty. Therefore, considering positions that are net short on European indices while being long on US ones might be a wise strategy.
Create your live VT Markets account and start trading now.
Insights 
VT 
