For EUR/USD options, the expirations are as follows: – 1.1500 with 1.8 billion – 1.1555 with 1.7 billion – 1.1575 with 1 billion – 1.1650 with 961 million – 1.1700 with 1.3 billion – 1.1730 with 1.1 billion In GBP/USD, expirations include: – 1.3385 with 775 million – 1.3400 with 590 million For USD/JPY, the expirations are: – 146.75 with 925 million – 147.00 with 1.9 billion

USD/JPY Details

Additional USD/JPY details show this expiration: – 148.75 with 687 million AUD/USD options have these expirations: – 0.6450 with 907 million – 0.6500 with 574 million – 0.6650 with 682 million For USD/CAD, expirations occur at: – 1.3630 with 1.5 billion – 1.3635 with 1 billion This data highlights potential risks, such as losing investments and emotional impacts. Given the significant options expirations, traders should expect price movements toward these levels. For the euro, the broad range from 1.1500 to 1.1730, which is above current market prices, suggests that big positions can sway market sentiment. This same behavior is evident now around the 1.0800 level, particularly after the European Central Bank’s recent rate cut, putting it on a different course than the U.S. Federal Reserve.

British Pound Analysis

For the British pound, the tight grouping around 1.3400 indicates a previous battle zone. The market is currently hesitant to move decisively above 1.2800 ahead of the July 4th general election. Political uncertainty and a cautious Bank of England, which maintained rates in its last meeting, point to a likely range-bound market until new leadership is established. The dollar-yen expirations just under current market levels, especially the large 1.9 billion at 147.00, indicate that traders are hedging against a sudden reversal. After Japan’s Ministry of Finance spent a record 9.8 trillion yen on interventions in April and May, we believe any attempt to reach the 160 level will face renewed selling pressure. Selling call options at higher strikes could be a smart way to prepare for this expected resistance. For the Australian dollar, the expirations between 0.6450 and 0.6650 reflect the ongoing struggle. We see 0.6650 as a crucial ceiling since recent weak industrial production data from China dampens enthusiasm for the currency. The pair is likely to stay within this range, making strategies that take advantage of low volatility appealing. The Canadian dollar expirations at 1.3630 and 1.3635 indicate a strong support level just below the current price. With the Bank of Canada cutting interest rates since June while the Fed remains steady, the overall trajectory for this pair seems to be upward. We consider these large option clusters as potential support, where buyers might step in if prices dip. Create your live VT Markets account and start trading now.

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Silver’s price has dropped a bit to about $38.80, but it is still near a ten-year high of $39.00. This price drop is mainly due to a rising demand for safe-haven assets because of ongoing trade tensions. Trade conflicts between the US and EU are creating global stress, and the EU is planning counteractions to US tariffs. Germany is calling for a tougher approach against the US after President Trump’s suggestion to raise baseline tariff rates. A report from the Wall Street Journal mentioned that Trump wants to set the new tariff rate between 15% and 20%, while also keeping restrictions on automobile tariffs.

The Federal Reserve’s Influence On Silver

Although many expect the Federal Reserve to keep interest rates between 4.25%-4.50%, silver prices have stayed steady. The 20-day EMA is at $37.40, and the 14-day RSI is between 60.00 and 80.00, suggesting a positive trend. The $40.00 level is acting as resistance, while the high from June 18 at around $37.30 serves as support. Silver’s price is shaped by geopolitical tensions and its reputation as a safe haven, plus industrial demand plays a role too. The Gold/Silver ratio is useful for assessing silver’s relative value, as silver often moves in line with gold due to their similar safe-haven characteristics. We believe that the current situation is favorable for silver derivatives. Ongoing trade conflicts lead to market uncertainty, which typically increases interest in safe assets. This scenario establishes a strong basis for silver’s potential price rise in the coming weeks.

Global Geopolitical Strains And Silver

The geopolitical stresses we see are not one-time events; they are part of a larger, ongoing issue. For example, recent US tariffs on Chinese electric vehicles and the EU’s investigations into subsidies show that global trade friction is persistent. This ongoing tension highlights the importance of holding safe-haven assets. In addition to being a good investment, silver has strong industrial demand that helps support its price. The Silver Institute predicts global industrial demand will reach a record 690 million ounces in 2024, mainly due to growth in solar panels and cars. This strong fundamental demand provides added security for long positions. Given the favorable technical outlook, we see pullbacks toward the support level near $37.30 as good buying opportunities for call options or other bullish trades. The $40.00 level remains an important target. If silver breaks above that mark, it could gain even more upward momentum. We are also monitoring the Gold/Silver ratio, which is currently around 79:1—much higher than the 21st-century average of about 60:1. A high ratio usually means silver is undervalued compared to gold, suggesting there is room for silver prices to rise. This relative value makes silver an attractive choice compared to its pricier counterpart. Create your live VT Markets account and start trading now.

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The short position on the dollar is currently the most popular trade in the financial markets. Long-term investors are reducing their holdings in dollar assets. In recent months, the value of the dollar has fallen, although this decline is slowing down. The future movement of the dollar is uncertain, especially with upcoming updates on tariffs that may impact the markets.

Crowded Dollar Short

Bailey warns that the crowded dollar short could pose significant risks but also present a tactical opportunity. According to the latest CFTC Commitment of Traders report, speculative short positions on the U.S. Dollar Index have reached their highest levels in months, which may lead to a potential market squeeze. This extreme lack of confidence in the dollar means that even a small piece of good news for the U.S. could lead to a swift change in these trades. We suggest using options to prepare for a rebound in the dollar, even if just temporary. Buying low-cost, short-term call options on the dollar or selling put options can provide a defined-risk strategy to benefit from the unwinding of these crowded trades. A similar situation happened in early 2021 when crowded short positions reversed sharply, surprising many traders and pushing the DXY index up nearly 4% in the first quarter. While it’s true that long-term investors are becoming less enthusiastic about U.S. assets, recent data, such as stronger-than-expected retail sales figures in the U.S., could provide a near-term boost for the dollar. These positive figures have the potential to challenge the overall negative outlook and could trigger the start of a short squeeze. Therefore, our focus should be on immediate tactical changes rather than long-term trends.

Key Volatility Event

The August 1 tariff deadline is a crucial event that might kick off the dollar rally we expect. Changes to protectionist trade policies could lead investors to seek safety, with the dollar benefiting the most. We should think about using derivatives to prepare for increased currency volatility around this date, as the market’s response is likely to be quick and substantial. Create your live VT Markets account and start trading now.

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Opendoor Technologies has seen an incredible increase in its stock price, jumping nearly 450% in the last month. In just five days, shares have surged about 230%, going from around $1.00 to over $3.00. This recent stock rise is driven by Eric Jackson of EMJ Capital, who publicly supported Opendoor on social media. He highlighted the possibility of Opendoor replicating Carvana’s earlier success, which saw a big rebound in its stock. Opendoor is set to announce positive EBITDA in its upcoming earnings report, thanks to cost-cutting efforts and limited competition in the real estate iBuying space. However, the company does face challenges, particularly its high debt levels. Opendoor’s stock history shows extreme ups and downs, peaking in 2021 and dropping to around $1 by the end of 2022. Although there is a chance for big rewards, it’s crucial to approach these speculative stocks with caution due to their risks and lack of stable earnings. The stock’s recent rise has led to incredibly high implied volatility in the options market. Data indicates that implied volatility for short-term options is over 200%, making both calls and puts quite costly. This suggests that the market is expecting big price swings, which makes buying options a risky investment. For traders who align with Jackson’s optimistic view, considering call options can be a way to bet on further gains, but the high prices are a concern. There’s also notable short interest in the stock, reported at over 20%, which could fuel a continued squeeze. This setup makes long call options appealing, but they are pricey, meaning the stock must rise significantly just to break even. It’s also important to note the fundamental challenges, such as the company’s high debt exceeding $4 billion. The overall housing market is tough too, with the National Association of Realtors reporting a 3.3% drop in existing-home sales in June. These risks could make purchasing put options a smart strategy for those who think the rally might not last. With premiums on both sides being steep, selling options appears to be a strong, though high-risk, opportunity. Strategies like selling cash-secured puts or covered calls allow traders to collect good premiums amid market fear and uncertainty. The main risk is being assigned the stock if it moves sharply against the position before the next big event. We recall the stock reaching above $30 in 2021, only to crash, showing its historical boom-and-bust pattern. The next big moment will be the Q2 earnings report expected around August 3rd, which will either confirm the recent excitement or cause the stock to fall. Traders should also be ready for a significant drop in option prices after the announcement, known as an “IV crush,” as uncertainty decreases.

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EUR/JPY is trading positively around 172.60 early in the European session. The strong upward movement is supported by a bullish trend above the 100-day EMA and a solid RSI. Resistance is at 173.11, while initial support is found between 172.00 and 171.90. Political uncertainty in Japan is affecting the Yen, especially after the Liberal Democratic Party lost control in the upper house. This situation allows the EUR/JPY cross to rise to about 172.60, supported by fiscal worries in Japan. The pair looks strong on daily charts, remaining above key moving averages.

Potential Gains And Risks

If momentum continues, further gains may challenge the 173.11 level, pushing towards targets at 173.75 and 174.52. On the downside, falling below the support could lead to a drop to 170.81 and possibly 170.00. The Japanese Yen’s value reflects Japan’s economic performance and the Bank of Japan (BoJ) policies. Although currency interventions are rare, the Yen has weakened due to differences in policies with major banks. Recently, a narrowing of this gap has helped support the Yen. Market sentiment plays a significant role as well. The Yen acts as a safe-haven currency, often gaining strength during global market stress. These factors all affect the Yen’s value against other currencies in different market conditions. Given the current bullish momentum, traders might consider strategies that take advantage of a potential move toward the 173.11 resistance level. Buying near-term call options could be an easy way to benefit from this positive trend. The strong RSI and the trading position above important moving averages reinforce this optimistic view.

Diverging Central Bank Policies

It’s important to consider diverging central bank policies. The European Central Bank lowered interest rates in early June 2024, indicating a possible easing cycle. This is in stark contrast to the growing belief that the Bank of Japan may soon need to tighten its policy. Japan’s core inflation rate, which excludes fresh food, was 2.5% in May 2024, staying at or above the BoJ’s 2% target for the 26th consecutive month. This ongoing inflation puts pressure on Governor Ueda to think about raising rates, possibly in the third quarter. Such a decision would strengthen the Yen and challenge the current trend in the currency pair. We must also consider the government’s readiness to intervene, as seen with the 9.79 trillion yen intervention in April and May 2024 to support the Yen. This history suggests that as the pair rises, the risk of abrupt government action increases. Holding unhedged long positions becomes riskier with each upward movement. The political situation adds more uncertainty. Prime Minister Kishida’s approval ratings have dropped below 20% in some polls. This low popularity could cause fiscal delays that weaken the Yen further. Alternatively, it might lead to major policy changes aimed at winning back public support. Thus, we see value in using option spreads to manage this uncertainty. A bull call spread, for example, could allow traders to gain from a moderate rise toward 173.75 while limiting potential losses. This strategy offers a balance between the bullish technical signals and the substantial fundamental and political risks of a sudden market reversal. Create your live VT Markets account and start trading now.

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Crude oil has stabilized after the turbulent June caused by the Israel-Iran conflict. With geopolitical issues no longer affecting prices, traders are now focusing on global growth trends. There is a general upward momentum thanks to ongoing government spending and easy money policies. The August 1 tariff deadline might make traders cautious, but any changes in political messages could shift market expectations.

Risks To The Bullish Outlook

Factors that could challenge a positive outlook include concerns about tariffs affecting growth or shifts in interest rate expectations. The market may fluctuate between 60 and 90, but current patterns indicate a possible upward trend. On the daily chart, prices dropped after the Israel-Iran conflict but found support around 64.00. Buyers are looking to push prices higher, while sellers need to break this support to drive prices down to around 55.00. The 4-hour chart shows a peak at 69.00 before the price returned to support. Trading may continue within support and resistance levels, awaiting a possible breakout. On the 1-hour chart, a slight downward trend marks the decline to support. If buyers can break above this trendline, they might push for new highs, while sellers will aim to drive prices lower and break support.

Opportunity For Positioning

The current calm market presents a great chance for positioning. A recent report from the U.S. Energy Information Administration (EIA) indicated a bigger-than-expected drop in crude inventories by 4.1 million barrels. This suggests that buying interest is strong beneath current prices and reinforces the technical support at this level. The emphasis on global growth is warranted, especially with new data showing China’s Caixin Manufacturing PMI exceeded expectations at 51.7, reflecting growth in the world’s largest oil importer. Additionally, futures markets, as per the CME FedWatch Tool, show over a 90% chance that the Federal Reserve will keep interest rates unchanged, easing a significant concern for the markets. This supports the notion that policies are favorable for demand. Looking at the tariff deadline from the previous administration, we can reference the 2018-2019 trade war. During that time, while tariffs caused short-term market fluctuations, the overall driver remained the broader global growth outlook rather than political news. Therefore, we should see any declines due to tariffs as potential buying chances, unless they coincide with genuine economic setbacks. From a derivatives perspective, this outlook suggests selling cash-secured puts with a strike price at or slightly below 64.00. This strategy allows us to earn premium while establishing a buy point at a crucial support level. For those who are more directly bullish, buying a call spread, such as the 65/70 spread, offers a defined way to profit from upward movement toward the upper end of the short-term range. To capitalize on the anticipated stable price movement between support and resistance, traders might consider an iron condor. This options strategy can benefit from low volatility and time decay as long as prices stay between the specified strikes. With the CBOE Crude Oil Volatility Index (OVX) near its recent lows, selling premium becomes an appealing strategy. As we near the slight downward trendline, breaking above it could signal a chance to enter new long positions. A straightforward approach would be to buy near-term call options to benefit from a quick rise toward the 69.00 resistance. On the other hand, a definitive drop below the 64.00 support would signal an opportunity to buy puts, aiming for a deeper correction. Create your live VT Markets account and start trading now.

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The Bank of England’s governor, Andrew Bailey, noted that the UK’s yield curve is steepening in line with global trends. This steepening is due to uncertainties in trade and fiscal policies. Recent figures reveal that the UK’s public sector net borrowing rose to £20.7 billion in June, the second-highest June figure on record. Only the borrowing levels during the Covid pandemic were higher. With rising yields and ongoing inflation, Chancellor Rachel Reeves faces more pressure as she prepares for the autumn Budget.

Market Expectations

The governor’s comments reflect what the market has been anticipating for weeks. His acknowledgment of trade and fiscal policy uncertainties supports the idea that the long end of the UK yield curve is at risk. This indicates continued pressure on long-term government bonds, known as Gilts. Given this situation, we believe it makes sense to prepare for further steepening of the Gilt curve in the coming weeks. Derivative traders can act on this by buying ten-year Gilt futures while also selling two-year Gilt futures. The uncertainties Bailey mentioned should lead to a wider gap between these two points on the curve. The increase in government borrowing intensifies this trade. The UK’s Debt Management Office plans to issue a hefty £277.7 billion in Gilts for the 2024-25 fiscal year, which will likely push long-term yields higher due to the large supply. This fundamental shift from fiscal policies supports the technical case for a steeper curve.

Inflation Concerns

Persistent inflation, particularly in the services sector—which recently reported 5.7%—adds difficulty to the Bank of England’s role and increases market volatility. While overall inflation has reached the 2% target, these underlying pressures create uncertainty for short-term rates. We recommend considering options on interest rate futures to benefit from anticipated price fluctuations. This level of borrowing, outside of a crisis, is historically significant, reminiscent of the aftermath of the 2008 financial crisis, which led to long-lasting uncertainty. All attention will now be on the Chancellor ahead of the Autumn Statement for hints of fiscal responsibility. Any move away from fiscal prudence could speed up the steepening of the curve we are preparing for. Create your live VT Markets account and start trading now.

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GBP/USD fell below 1.3500 after gaining over 0.5% in a previous session, settling at around 1.3480 in Asian trading on Tuesday. This drop happened as the US Dollar remained stable, with caution surrounding the August 1 tariff deadline announced by US President Donald Trump. US Commerce Secretary Howard Lutnick confirmed that new tariff rates would be set on August 1, but trade discussions will continue. The British Pound is showing a slight recovery against the US Dollar, trading near 1.3480 during the American session.

Sterling Attempts Recovery

Sterling’s rise is partly due to a weakening US Dollar, impacted by low US Treasury yields and uncertainty over future trade talks and Federal Reserve policies. Expectations for UK interest rates are uncertain after mixed economic data, creating cautious optimism ahead of the Bank of England’s decision in August. In other market news, EUR/USD regained 1.1700 during the European session, and Solana hit $200. China’s second-quarter GDP showed a 5.2% year-on-year growth, but concerns about fixed-asset investment and retail sales continue. We see the recent drop below 1.3500 followed by a tentative recovery as a sign of potential volatility rather than a clear trend. Recent data indicates 1-month implied volatility for GBP/USD has risen to around 7.5%, reflecting market nervousness ahead of key events. This means option premiums are becoming more costly, making volatility-selling strategies riskier.

Central Bank Expectations

The upcoming Bank of England meeting is crucial, especially since the Office for National Statistics reported UK CPI inflation reaching the 2.0% target. Historically, hitting this target often leads to policy changes. We expect the market to fully factor in a rate cut for the August meeting, which may limit Sterling’s strength in the coming weeks. On the other hand, uncertainty about Federal Reserve policy is limiting dollar strength, as indicated by low Treasury yields. While Mr. Lutnick’s comments on trade add geopolitical risks, the CME FedWatch Tool shows a greater than 60% chance of a rate cut by September. This suggests the market is leaning toward a more dovish US central bank, preventing the dollar from rising significantly. This situation presents challenges for both central banks, making it hard to place strong directional bets. Given the mixed pressures, we believe that long volatility positions are the safest option for traders. A long straddle using options that expire after the August central bank meetings could benefit from the sharp moves likely to occur, regardless of the direction taken by the pair. Create your live VT Markets account and start trading now.

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GBP/USD has dropped slightly after rising over 0.5% the previous day. It’s currently trading around 1.3480 during Tuesday’s Asian session. The decline occurred as the US Dollar remained stable, while concerns about US President Donald Trump’s tariff deadline on August 1 increased. US Commerce Secretary Howard Lutnick confirmed that the tariff deadline is firm. Tariffs will start on August 1, but trade talks will continue. Market sentiment is also affected by worries over the Federal Reserve’s independence, with US Treasury Secretary Scott Bessent expressing concerns about the Fed’s growing responsibilities.

Market Reactions and Economic Data

Bessent has suggested a thorough review of the Fed, and President Trump’s criticism of Fed Chair Jerome Powell has led to speculation about a possible dismissal. In the UK, upcoming S&P PMI data is expected to show less decline in manufacturing and solid growth in services. The Bank of England may reduce long-dated bond sales due to decreased demand, and traders anticipate at least two rate cuts by 2025, even with lower easing expectations. The Pound Sterling, shaped by the Bank of England’s policies and economic indicators, is an important global currency. Its main trading pairs include GBP/USD, GBP/JPY, and EUR/GBP. With conflicting pressures on the currency pair, traders should brace for higher volatility rather than predict a clear direction. The confirmed tariff deadline raises significant event risks, while potential strong UK economic data may counterbalance this. This uncertainty suggests that using options strategies might be wiser than taking outright positions. Market concerns regarding upcoming trade restrictions and the criticism of Powell are already evident. This is shown in indicators like the CBOE Volatility Index (VIX), which recently jumped above 14 for the first time in weeks, indicating a rise in market anxiety. Bessent’s call for reviewing the central bank’s mandate adds to the political uncertainty, historically making the US dollar a safe haven.

Trading Strategy Considerations

On the other side, the pound is getting support from recent data, which shows the S&P Global/CIPS UK Services PMI for July holding firm at 53.0, reflecting strong growth in the UK’s largest sector. This positive economic news complicates a solely negative outlook on the pound. However, the market has factored in at least two interest rate cuts by the Bank of England by the end of 2025, limiting the currency’s long-term potential. This situation is reminiscent of the 2018-2019 US-China trade war, where headline risks caused GBP/USD volatility to increase by over 30% in just weeks. During that time, sudden and unpredictable moves became common after policy announcements. We expect a similar pattern of erratic price movements leading up to and right after the August 1 deadline. Therefore, we are preparing to benefit from significant price swings, regardless of the direction. We recommend traders consider purchasing options strategies like long straddles on GBP/USD. This involves buying both a call and a put option at the same strike price and expiry. This strategy allows traders to profit from a major move following the tariff implementation or any surprising UK data releases. Create your live VT Markets account and start trading now.

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Gold prices in Saudi Arabia dropped on Tuesday. The price per gram decreased to 408.80 Saudi Riyals (SAR) from 409.77 SAR the day before. In the same way, the price for Gold per tola fell to 4,768.02 SAR from 4,779.48 SAR. In Saudi Arabia, Gold prices adjust according to global rates converted to local currency.

Historical Role Of Gold

Gold has long been seen as a safe value and a way to trade. It is often viewed as a secure asset during times of economic trouble and inflation. Central banks keep large Gold reserves to help their economies in tough times. In 2022, they added 1,136 tonnes of Gold, totaling about $70 billion—the highest annual purchase on record. Gold typically has an inverse relationship with the US Dollar and US Treasuries. Because it doesn’t have a yield, Gold prices tend to rise when interest rates are low, while a strong US Dollar can push prices down. Gold values may also increase during times of political instability or fears of economic decline. Overall, Gold prices largely depend on what happens with the US Dollar.

Impact Of US Monetary Policy

Given the inverse relationship with the dollar, the recent drop in Gold prices can be attributed to US monetary policy. The US Dollar Index (DXY) has remained strong, recently trading above 105. This strength comes as Federal Reserve officials indicate that interest rates may stay high for an extended period. A strong dollar poses challenges for assets priced in dollars. Traders might want to prepare for continued pressure or sideways movement on Gold in the short term. With May’s Consumer Price Index (CPI) data showing that inflation remains stubborn, the Fed has little reason to lower rates, which limits potential gains for Gold. Strategies like buying put options or setting up bear call spreads could be smart moves to take advantage of possible price stagnation or declines. However, we also need to consider the solid underlying support mentioned in the analysis. The World Gold Council reported that central banks continued buying in the first quarter of 2024, adding a net 290 tonnes to global reserves. This ongoing institutional demand creates a strong base, preventing a major price drop. This situation presents a balancing act for traders. Hawkish monetary policies may pull prices down, while geopolitical risks and buying from official sectors may push them up. Ongoing conflicts in the Middle East and Eastern Europe suggest that any significant price dip is likely to prompt new safe-haven buying, potentially increasing volatility in the weeks ahead. Historically, we’ve seen similar scenarios during intense rate hikes, such as in the early 1980s under Fed Chair Paul Volcker. Although high interest rates eventually drove Gold prices down back then, the initial period was marked by high volatility as markets absorbed mixed signals. We expect a similar situation now, where price movements will be erratic and very responsive to daily economic reports. Create your live VT Markets account and start trading now.

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