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A comparison of Ethereum’s spot prices and futures highlights their interaction and influence.
Ethereum trading mainly involves two options: spot prices and futures.
**Spot Prices**
Spot prices indicate the current rate for buying or selling Ethereum right away. When you trade on the spot market, you pay immediately and receive Ethereum without delay.
**Futures**
Futures involve contracts to buy or sell Ethereum at a set price on a future date. They let traders speculate on price changes or protect their investments.
Futures prices can differ from spot prices due to factors like trader expectations, holding costs, and market sentiment. If traders expect prices to go up, futures are priced higher (a situation known as contango). Conversely, if they anticipate a drop, futures prices decrease (this is called backwardation). The cost of holding Ethereum, including interest or borrowing rates, also affects futures prices and reflects the market’s outlook.
The futures market, especially at the CME with institutional participants, often influences short-term pricing. Retail traders mainly affect the spot market with their individual trades. Psychological benchmarks, such as $4000, can influence trader behavior. Traders often take advantage of differences in spot and futures prices for arbitrage opportunities, quickly adjusting prices as futures values change.
**For Beginners**
It’s useful for beginners to watch both markets. The spot market shows current prices and sentiment, while the futures market reveals expectations from larger traders. Notably, CME’s Ethereum futures grew by 112% in 2025, indicating active participation in the market. The CME has onboarded major trading firms and reported increased daily volumes, showing institutional interest in crypto derivatives. Understanding these dynamics can help in making better trading decisions.
We recommend that derivative traders concentrate on the futures market to gauge Ethereum’s next moves. This market demonstrates the strategies of large institutional players, especially around important levels like $4000. Their actions can often predict changes in the spot price.
Recent regulatory developments emphasize this view of institutional influence. After the SEC approved spot Ether ETFs in late May 2024, open interest in CME futures soared to a record high of over $14 billion. This influx signals that sophisticated traders are preparing for significant price movements.
Currently, we see the interaction between the futures and spot markets in action. The rapid increase in Ethereum’s price from below $3,100 to over $3,800 during the week of the ETF news was driven by strong buying in the derivatives market. This suggests that observing futures can provide early alerts for major price shifts.
By looking back at the launch of spot Bitcoin ETFs in January 2024, we can see a similar pattern. Initially, there was profit-taking, but then a steady rise led to a new all-time high within two months. We could see a comparable situation with Ethereum, where short-term volatility might precede a significant upward move.
**Future Strategies**
In the weeks ahead, traders might consider using options to prepare for anticipated volatility around the ETF launch. Buying call options can provide exposure to potential gains while minimizing downside risk, aligning with a long-term bullish outlook, even if short-term profit-taking happens.
US stock market shows mixed performances: technology thrives, communication services struggle
The US stock market showed mixed results, with different sectors performing variably. Technology stocks gained ground, with Nvidia rising by 0.85% and Advanced Micro Devices increasing by 2.59%.
In the communication services sector, Google dropped by 0.74%, but Meta increased by 0.99%, helping to offset some losses. The consumer cyclical sector saw gains thanks to Tesla’s 2.62% rise and Amazon’s 0.89% increase.
The Financial Sector
The financial sector had moderate changes, with JPMorgan Chase up by 0.19% and Visa up by 0.32%. In healthcare, Gilead Sciences fell by 2.63%, and Johnson & Johnson dropped by 1.02%. While technology and consumer cyclical sectors showed growth, communication services and healthcare faced difficulties. There are still selective growth opportunities available. Investors should focus on technology, especially semiconductors, due to their strong performance and growth potential. It is essential to be cautious in the communication services sector due to recent fluctuations. Consider diversifying portfolios by including strong performers like Tesla and Nvidia, while monitoring Google’s performance for potential recovery. Staying updated with market data and insights is wise for navigating this volatile environment.Derivative Trading Strategies
Given the strength in technology, derivative traders might consider buying call options on major semiconductor stocks. The Semiconductor Industry Association has projected global sales to rise by 13.1% in 2024, supporting the positive trend seen in stocks like Advanced Micro Devices that increased by 2.59%. This strategy allows for participation in potential gains while limiting risk to the premium paid. The mixed market sentiment is evident in the CBOE Volatility Index (VIX), which has recently stayed around the 13 level, lower than its long-term average. This relatively low implied volatility makes buying options cheaper compared to historical prices. It’s a good time to establish positions before any market swings could increase option premiums. For strong-performing consumer cyclical stocks, traders can consider selling cash-secured puts on electric vehicle makers. This approach generates income from the option premium and sets a potential purchase price below the current market level, benefiting from the stock’s recent 2.62% gain while providing a buffer. In the communication services sector, a pairs trade could be effective. Traders could buy call options on the stronger social media company while simultaneously buying put options on the search giant. This strategy focuses on the performance difference between the two, protecting against wider sector movements. With the healthcare sector under pressure, especially after a major pharmaceutical company’s stock fell due to disappointing clinical trial results, buying puts can directly target further declines. For cost management, a bear put spread on that stock or the one that fell by 1.02% can define risk and potential rewards. This tactic capitalizes on specific negative factors affecting these companies. Create your live VT Markets account and start trading now.UOB Group: GBP must stay below 1.3480 to prevent reaching 1.3365
The Pound Sterling (GBP) needs to stay below 1.3480 against the US Dollar (USD) to have a chance at reaching 1.3405. Analysts think GBP may trend downward, but it’s uncertain if it will hit the support level at 1.3365.
In the last 24 hours, GBP rose to 1.3588 but then fell to 1.3417, with predictions it might test 1.3400. Major support at 1.3365 is not expected to be reached anytime soon.
Short Term Outlook
The outlook for the next 1 to 3 weeks has changed from positive to neutral. GBP is likely to move between 1.3450 and 1.3590. There is downward pressure, but it remains unclear if GBP can reach the key support at 1.3365. To keep this downward trend going, GBP should not exceed the resistance level of 1.3510. Given this outlook, we advise derivative traders to think about strategies that profit from a drop or stagnation in the Pound. This may involve buying put options or setting up bearish credit spreads to take advantage of the expected fall toward 1.3405. The currency must first show it can’t maintain a rally above 1.3480. Our negative view is backed by recent data showing UK inflation remains high, recorded at 4.0% in January 2024, which is twice the Bank of England’s target. While this implies that interest rates will likely stay high, it also raises the risk of economic stagnation, putting pressure on the currency. This economic strain makes a steady rise above 1.3590 unlikely in the coming weeks.Market Insights
At the same time, the Dollar is strong due to a robust US economy. The latest jobs report revealed a remarkable addition of 353,000 jobs, keeping unemployment low at 3.7%. This allows the Federal Reserve to postpone interest rate cuts, leading to a difference in policies that historically benefits the Dollar over the Sterling. This reinforces the downward pressure between the two currencies. We also see that market positioning shows caution. Recent Commitment of Traders (CFTC) reports indicate that large speculators have reduced their long positions in the Pound. This suggests that institutional confidence in the Pound’s potential for growth is decreasing. For traders, this signals that taking a contrary bullish position now carries increased risk, especially if the price cannot break through the 1.3510 resistance. Create your live VT Markets account and start trading now.Société Générale analysts expect EUR/GBP to decline, with support anticipated between 0.8645 and 0.8660 levels.
EUR/GBP has dropped over 0.60% after breaking out of its recent range. The pair aims to reach 0.8800 and higher, with support between 0.8645 and 0.8660.
The EUR/GBP uptrend remains strong after moving past a brief consolidation last week. Daily MACD indicators support this momentum, with targets set at 0.8800 and potential projections at 0.8850 and 0.8875.
Short Term Pullback Considerations
If there’s a temporary pullback, support could be around 0.8660 or 0.8645, within the rising channel. Upcoming goals include the channel’s upper limit at 0.8800 and further projections. Given the upward trend, we suggest that traders consider taking bullish positions. Any short dips towards the support in the rising channel should be seen as buying opportunities, aligning with the recent breakout. The overall economic outlook backs this technical viewpoint. The monetary policies of the two central banks are diverging. Recent figures show Eurozone inflation rising to 2.6% in May, while the European Central Bank is expected to lower interest rates sooner than the Bank of England. This difference could increase pressure on the currency pair.Diverging Monetary Policies
On the other hand, the UK is grappling with stubborn inflation, especially in its key services sector, which recently saw a 5.9% annual rise. This ongoing price pressure makes the central bank reluctant to reduce borrowing costs soon. The varying policy approaches are a major reason behind our current perspective. Historically, the 0.8800 area has been a significant psychological and technical barrier. Earlier rallies in 2022 and early 2023 struggled in this range, marking it as a vital test for the current uptrend. A clear break above this level would show strong buyer confidence. Thus, we recommend buying call options with strike prices targeting the 0.8800 to 0.8850 range. Traders might look for options expiring in four to six weeks to give the trend time to develop fully. This strategy provides a defined-risk way to profit from the expected rise. However, it’s essential to manage risk carefully. The identified support zone is critical. If the price drops below this area, our bullish outlook would be invalidated, prompting us to close or adjust positions accordingly. Create your live VT Markets account and start trading now.Prime Minister Carney says trade negotiations with the US are currently intense for Canada.
Canadian Prime Minister Carney has shared his thoughts on the ongoing trade talks with the United States, saying they are currently very intense. He insists that any trade agreement must be fair for Canada.
Carney also noted that a deal without tariffs is unlikely, and the focus is now on how high those tariffs may be.
Challenge of Negotiations
When asked about the difficulties of negotiating with Canada, he acknowledged the challenge but emphasized that these efforts are for the benefit of the country. His comments point to growing uncertainty in Canadian-U.S. trade relations. This uncertainty is likely to cause increased fluctuations in Canadian assets, especially the USD/CAD exchange rate. We should prepare for a weaker Canadian dollar in the derivatives market. The Prime Minister’s remarks are crucial since the United States is Canada’s biggest trading partner. Last year, two-way trade in goods and services topped $900 billion, with over 75% of Canadian exports going to the U.S. Any tariffs could significantly harm the Canadian economy. To act on this outlook, buying currency options makes sense. Consider purchasing call options on the USD/CAD pair, which would profit if the Canadian dollar weakens as expected. His statement that a no-tariff deal is unlikely supports this negative outlook for the loonie.Trade Friction Patterns
Historically, trade friction has led to a weaker Canadian dollar. During the tense USMCA negotiations in 2018, the USD/CAD exchange rate rose from around 1.25 to over 1.35 as negative news surfaced. We expect a similar pattern as current trade challenges continue. Additionally, there are risks for the S&P/TSX Composite index, especially among manufacturers and resource companies. We recommend buying put options on ETFs that track the Canadian market to protect against potential downturns caused by tariff news. The mention that Canada is being “difficult” suggests these talks may become contentious, affecting investor confidence. The uncertainty about future tariffs presents its own trading opportunities. This uncertainty, highlighted in Carney’s remarks, indicates we should brace for sharp price movements in both directions as news unfolds. We can set up long volatility plays, like straddles on key Canadian export stocks, to profit from significant moves regardless of the final deal. This view is further supported by the upcoming 2026 joint review of the USMCA agreement, which figures like Trump have said could be contentious. The current intensity of talks likely signifies a lengthy period of trade-related volatility. Our strategies should be designed to take advantage of this theme over the coming months. Create your live VT Markets account and start trading now.EUR/USD hits new lows and approaches a key support zone amid persistent downward momentum and resistance
The EURUSD pair is on a downward trend and has hit new session lows. It’s currently testing an important support range between 1.1614 and 1.1631, which is based on earlier swing levels.
Previously, a short rally came to a halt around 1.1769, close to the 1.1787 resistance linked to July’s highs. The momentum shifted after breaking through the 50% midpoint of July’s range at 1.1693 and the 200-hour moving average at 1.1687, which reinforces the bearish outlook.
Key Support and Resistance Levels
The current support zone between 1.1614 and 1.1631 may attract buyers. However, the overall trend is still downward with few signs of recovery. Intraday traders should keep an eye on the 1.1664 level, which is the initial resistance point from early US sessions. If the price holds above this level, short-term buyers might see a minor gain. Yet, a stronger challenge lies at the 100-bar moving average at 1.1675, creating a tougher barrier. For buyers to regain control, prices must climb above these resistance levels. If they fail to do so, the downward trend towards 1.1614 could be at risk of breaking. Given the ongoing downward pressure on the EURUSD, we believe traders should prefer bearish strategies in the coming weeks. The pair has struggled to maintain gains, indicating that sellers are still firmly in control. This situation makes long positions, like buying basic call options, relatively risky.Impact of US and ECB Monetary Policies
The primary reason for this decline is the growing policy gap between the US Federal Reserve and the European Central Bank (ECB). The Fed has indicated that interest rates will stay high to curb inflation, supported by a strong US labor market that added 187,000 jobs in August 2023, exceeding expectations. In contrast, the ECB is more cautious, facing signs of a slowing Eurozone economy. Recent data makes put options or bear put spreads on the currency pair more appealing. While inflation in the Eurozone remains high at 5.3% as of August, the latest PMI data from Germany, the largest economy in the bloc, has consistently pointed toward economic contraction. This economic divide between a robust US and a weakening Eurozone strengthens the bearish case. We can reference the 2014-2015 period when a similar policy divergence caused a significant decline of over 20% in the EURUSD. During that time, rallies were consistently sold, and we are starting to see this pattern again today. This historical example suggests that any short-term strength should be met with skepticism unless there is a major technical or fundamental change. Now that the pair is testing a critical support zone, we expect increased implied volatility. Traders might prepare for a breakdown below the 1.1614 level but should use defined-risk strategies. A sudden reversal from this area could quickly wipe out profits from more aggressive bearish positions. For now, we see little reason to resist this downtrend. Unless the price moves decisively above the broken 200-hour moving average, we will view any upward movement as a corrective bounce within a larger decline. The easiest path appears to be downward. Create your live VT Markets account and start trading now.Positive market sentiment followed the announcement of a US-EU trade agreement.
The recent trade deal between the US and EU sets a baseline tariff at 15% and includes a commitment to buy US goods and energy. This is better than the previously suggested 30-50% rates, though it still resembles earlier discussions about universal tariffs.
Markets expect a slow August while waiting for results from a pharmaceutical trade probe. Trade deals with Asia, Mexico, and Canada are still on the table, and European leaders believe this new agreement could drive more business investments.
Upcoming US Data and Market Predictions
Important US data, like job reports and GDP figures, may impact the dollar. The Federal Reserve is likely to keep interest rates steady, making a September cut less likely. With the data calendar clearing, markets expect a quiet August. The dollar might consolidate and could move back towards the 98.50/99.00 range, depending on US data outcomes. The current one-week rates make the dollar less appealing for funding. We think the improved US-EU trade terms reduce immediate risks for European stocks. For example, after the US lifted steel and aluminum tariffs in late 2021, the Euro Stoxx 50 index saw stability. This suggests that selling out-of-the-money puts on European indices could be a smart way to earn earnings.Anticipating Lower Market Volatility
We expect lower market volatility, which is typical for August. The CBOE Volatility Index (VIX) is currently around 13, below its historical average, supporting the idea of a quieter market. This environment favors strategies that profit from time decay, like selling iron condors on broad market indices such as the S&P 500. Positive US economic data will likely back the central bank’s current policies. Recent reports indicate that Non-Farm Payrolls added 272,000 jobs, far exceeding expectations. This makes a September rate cut very unlikely. The CME FedWatch tool shows over a 90% chance that rates will remain steady at the next meeting. Given strong economic indicators, we expect the US dollar to stay strong, making a significant drop below 104 on the DXY index unlikely. Traders might consider selling short-dated put spreads on dollar-tracking ETFs to take advantage of this support level. The current interest rate difference continues to make the dollar an unattractive funding currency for carry trades. Create your live VT Markets account and start trading now.In June, India’s manufacturing output increased to 3.9%, up from 2.6% previously.
India’s manufacturing output rose to 3.9% in June, up from 2.6%. This increase shows that the manufacturing sector is improving.
The EUR/USD rate dropped to about 1.1630 as the US Dollar gained strength. The Euro faced challenges due to reactions to the EU-US trade deal and the European Central Bank’s policies.
Exchange Rates Status
The GBP/USD stayed just above 1.3400, moving up and down with the strong US Dollar. Money moving from the Euro to the Pound helped prevent larger drops in the GBP/USD rate. Gold prices came close to $3,320 per troy ounce. A strong US Dollar and ongoing US-EU trade agreements lowered the demand for gold. The US has a trade deadline on August 1 and the Fed is likely to keep interest rates steady. Analysts expect Nonfarm Payroll numbers to remain steady, hinting at an active week ahead. Questions arise for the Federal Reserve regarding its choice to delay rate cuts due to tariff issues and a strong economy. Critics argue this delay may not be wise given new challenges in the job market.Investment Opportunities
The rise in India’s manufacturing, signified by a strong purchasing managers’ index at 57.5, suggests it might be a good time to invest in Indian equities. Consider call options on the Nifty 50 index or major industrial stocks, as these output figures highlight a solid economy that can support market growth. The difference in central bank policies is opening up forex market opportunities. We think put options on the Euro make sense, as the European Central Bank’s recent rate cut contrasts with the Federal Reserve’s cautious approach. This policy difference is likely to keep the US Dollar stronger against the Euro in the upcoming weeks. The situation for the Pound is more complex but is also under pressure from the strong Dollar. With the Bank of England holding rates steady at 5.25% to fight inflation, we expect trading to stay within a range ahead of the UK’s July election. Strategies like iron condors on the GBP/USD pair could be effective in taking advantage of low volatility. Gold prices, currently around $2,330 per troy ounce, are being limited by the strong US Dollar and sustained high interest rates. We are considering buying put options on gold futures or related ETFs. Traditionally, a strong dollar and high real yields have posed challenges for gold. The resilience of the US economy, highlighted by a recent strong Nonfarm Payrolls report adding 272,000 jobs, supports the Fed’s choice to delay rate cuts. This economic strength may increase volatility around significant data releases, like the upcoming CPI report. We recommend using VIX call options to hedge against or capitalize on these expected market fluctuations. The ongoing debate about rate cut timing continues to stir market tension. We see this as a chance to create pair trades, such as going long on stable, rate-resistant sectors while shorting riskier growth stocks. This strategy allows for a market-neutral position while taking advantage of the current economic uncertainty. Create your live VT Markets account and start trading now.Dow average declines, while S&P and NASDAQ gain, as several stocks fluctuate positively
The stock market opened with mixed results. The Dow industrial average saw a small drop, while the S&P and NASDAQ indices rose. After just eight minutes of trading, the Dow was down 42.70 points, sitting at 44,859.22, a decline of 0.10%. In contrast, the S&P climbed by 7.49 points, up 0.12% to 6,396.13. The NASDAQ gained 50.36 points, a 0.24% increase, reaching 21,108.32. The Russell 2000 also rose by 4.83 points, or 0.21%, coming in at 2,265.89.
In individual stocks, Nvidia hit a new intraday high of $175.37 but is currently at $174.40, a rise of 0.53%. Meta rose $10, or 1.4%, to $722.79 ahead of its earnings announcement. Microsoft increased by $0.44, or 0.10%, now priced at $514.21. Apple remained steady, with its earnings report also approaching. Amazon gained $0.90, or 0.40%, valued at $232.40, with its earnings report coming up soon.
Tech Stocks Driving Market Gains
We see a split market, as Michalowski pointed out, with the tech-heavy Nasdaq and S&P supported by a few leading stocks. This focus suggests traders should pay more attention to these specific companies instead of the overall market. The difference in performance from the Dow Jones Industrial Average shows a narrow leadership. The earnings reports from Meta, Microsoft, Apple, and Amazon are this week’s key events. We can expect significant price movements. The derivative markets are reflecting this uncertainty, with implied volatility increasing ahead of the announcements. Our strategy should focus on positioning for these potential changes. The CBOE Volatility Index, or VIX, is around 12.5, which is low compared to the scale of these upcoming earnings. This indicates some market complacency but also makes buying options more affordable. The latest Consumer Price Index shows inflation cooling to 3.3%, giving the Federal Reserve more room to be patient, which generally favors growth stocks.Impact of Earnings Announcements
Historically, we see a “volatility crush” right after earnings are released, as uncertainty fades. This causes option premiums, which were high before the report, to drop sharply. We can take advantage of this by using strategies that benefit from large price moves or by selling expensive options to profit from the anticipated drop in volatility. Nvidia’s continued rise to new highs highlights the market’s strong focus on artificial intelligence. We anticipate that the reports from other tech leaders will be judged heavily based on their progress and plans in AI. Any positive surprises could further fuel the rally, while disappointments could lead to a quick reversal of these popular trades. Create your live VT Markets account and start trading now.Trump supports rate cuts, arguing they will improve the US economy despite its current success
The Federal Reserve is likely to keep interest rates the same in its meeting this week, even though some believe rates should be lowered. A suggestion to cut rates by 300 points could save the U.S. about $360 billion if there’s a 1% reduction.
There’s uncertainty about how effective lower rates would be. Such changes might not lead to lower rates across the board unless the Treasury chooses short-term borrowing. The Federal Open Market Committee is expected to maintain current rates during their meeting on Wednesday.
