The week of September 22-26 will bring important economic data from major markets, including the United States, Australia, and Japan. Key focuses include inflation data from Australia and the Bank of Japan’s core CPI. Additionally, the U.S. will release GDP figures and the core PCE price index. On Tuesday, we will look at the Eurozone and U.S. flash manufacturing and services PMIs, along with remarks from Fed Chair Powell. Wednesday features inflation figures from Australia and key data from Japan. Thursday and Friday will include significant announcements from the Swiss National Bank and various U.S. indicators.

Economic Data Highlights

In Australia, inflation is expected to rise to 2.9%, up from 2.8%, driven by higher electricity and housing prices. For Japan, the Tokyo core CPI is anticipated to increase to 2.8% year-on-year, up from 2.5%, due to rising food prices. The Bank of Japan is closely monitoring this situation. In the U.S., new home sales are expected to decline slightly to 651,000, down from 652,000. Core durable goods orders are predicted to drop by 0.2% month-on-month, after a previous increase of 1.0%. The core PCE price index is anticipated to rise by 0.2% monthly, which may lead to further Fed rate cuts. As the Federal Reserve signals two more rate cuts this year, we are particularly focused on Friday’s core PCE inflation report. A reading of 0.2% or lower would support the Fed’s strategy and likely boost risk assets. This aligns with our outlook since the Fed Funds Rate peaked at 5.50% in 2023 and the easing cycle started earlier this year. If the core PCE comes in at or below the 0.2% consensus, we expect a “risk-on” response that could lift equity indices. We should prepare to use options on the S&P 500 and Nasdaq 100, as lower inflation strengthens the case for rate cuts in October and December. However, if there’s a surprise reading of 0.3% or higher, we may see a shift, prompting the purchase of puts on major indices.

Potential Impacts on Markets

Due to the significance of this week’s data, we anticipate rising volatility. The CBOE Volatility Index (VIX) is currently around 14, a notable decrease from the highs during the banking stress of 2023. This creates an opportunity to buy straddles or strangles on indices, which could benefit from significant price swings following Friday’s announcement, no matter the direction. Outside the U.S., attention will be on Tuesday’s Eurozone PMI data to see if the summer’s economic optimism can continue. After a slow start to 2024, strong manufacturing and services data could support the euro against the dollar. Conversely, a disappointing result might reveal underlying weaknesses, possibly leading to short-term EUR/USD put options. Next, we’ll look at Australia’s inflation data on Wednesday, a crucial factor for the Australian dollar. After a surprising increase last month, another strong CPI above the expected 2.9% could delay any anticipated rate cuts from the Reserve Bank of Australia, creating a chance to trade AUD/USD strength using call options. We expect Thursday’s U.S. housing market data to confirm ongoing sluggishness, even with 30-year mortgage rates dropping to 6.26%, an 11-month low. Similarly, durable goods orders are likely to show weakness, especially outside the transportation sector. These trends support the Fed’s easing stance amid overall economic cooling observed throughout 2025. Finally, Friday’s Tokyo core CPI will provide more insight into Japanese inflation. Although the Bank of Japan is not expected to take immediate action, data approaching 3% signals a gradual shift away from years of deflation. This remains a long-term theme to watch for its potential effects on global bond yields and the yen. Create your live VT Markets account and start trading now.

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European stock markets opened lower, showing a cautious attitude among investors. The Eurostoxx fell by 0.4%, Germany’s DAX by 0.5%, France’s CAC 40 by 0.4%, the UK’s FTSE by 0.2%, and Spain’s IBEX by 1.2%. Italy’s FTSE MIB dropped by 0.5%. US futures also opened down, adding to the cautious sentiment. S&P 500 futures decreased by 0.3%, reversing some of Friday’s gains. In Europe, Spanish stocks lagged behind as BBVA adjusted its bid for the Sabadell takeover. BBVA shares fell nearly 2%, while Sabadell’s shares dropped 4% at the start of the trading session.

Caution in the Markets

With European markets and US futures signaling declines, the mood remains cautious. This risk-averse atmosphere suggests buying protective put options on major indices like the Euro Stoxx 50 or the DAX could be wise in the upcoming days. This is a simple way to protect against potential losses. This unease is heightened by recent economic data, particularly last week’s flash estimate of Eurozone inflation at 2.8%, slightly above expectations. This complicates the European Central Bank’s (ECB) decisions, making their October meeting a key moment for potential market volatility. We have noticed increased trading in options on Euribor futures as traders expect the ECB to keep rates steady longer than previously anticipated. The VSTOXX, which tracks Euro Stoxx 50 volatility, is rising toward the 18 level—a significant increase from the calmer summer period. A higher VSTOXX indicates that option premiums are becoming more expensive, suggesting traders anticipate bigger price movements ahead. This scenario makes strategies that benefit from volatility, such as long straddles on stocks with upcoming earnings, more attractive.

Finding Opportunities in Uncertainty

We recall the significant shifts by central banks in 2024, when unhedged portfolios faced challenges as inflation proved more persistent than expected. The current climate feels similar, suggesting that past experiences may offer insights for today’s market. Maintaining some exposure to long volatility positions is a valuable lesson from recent events. The specific downturn in Spain’s IBEX, affected by the BBVA and Sabadell merger news, presents a clear opportunity. Traders could consider bearish positions on the Spanish banking sector, which is lagging compared to the broader European financial industry. Selling call options on a group of Spanish banks could be an effective way to capitalize on this relative weakness. Create your live VT Markets account and start trading now.

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Technical Patterns

Gold has hit a new all-time high, gaining momentum since Friday. The lack of strong negative factors has supported its upward movement. However, the Federal Reserve’s outlook did not match market expectations for lower rate cuts. If strong US economic data comes out, we might see a shift to a more aggressive stance, possibly leading to a price drop like last year. In the long run, gold is likely to stay on an upward trend as real yields continue to fall due to the Fed’s accommodative strategy. Temporary pullbacks may happen if interest rate forecasts change. Looking at the daily chart, gold has reached a historic high. Buyers have a good risk-to-reward opportunity near the major trendline, while sellers are aiming for a breakout below, targeting the 3,120 level. On the 4-hour chart, gold’s price has bounced off a minor upward trendline at around 3,630. Buyers are likely to use this trendline to seek new highs, while sellers aim to break lower. The 1-hour chart shows resistance near the 3,723 level that may attract sellers looking for a price drop. Upcoming US economic reports, such as Flash PMIs, Jobless Claims, and the PCE report, could move the market. Gold is pushing to another all-time high, but this momentum could change quickly. The market is currently anticipating more rate cuts from the Federal Reserve than what was indicated in their last meeting. This difference poses a key risk; any strong economic data could trigger a fast reassessment. With US Core PCE inflation for August 2025 remaining high at 2.9% and jobless claims steady at approximately 215,000, the economic reports coming this week are crucial. We might consider buying put options or selling call spreads to prepare for a possible short-term decrease. This strategy would take advantage of a hawkish shift in interest rate expectations ahead of Friday’s PCE data.

Strategic Positioning

We observed a similar pattern in the autumn of 2024. A series of strong job reports then led to a quick 5% correction in gold as the market adjusted to the Fed’s policy. This past experience suggests that a pullback could provide a better chance to enter longer-term positions. While a correction seems likely, the overall outlook for gold remains positive as long as real yields are expected to drop. Thus, a pullback toward the major trendline support could be a good opportunity to buy longer-dated call options. This would let us re-enter the main upward trend at a more favorable price. Create your live VT Markets account and start trading now.

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**Bearish Roadmap** The bearish roadmap highlights two important levels: 6709.25 to 6691.25, which include VWAP and liquidity pools. For a bullish outlook, key levels are identified at 6717.75 to 6729.5. VWAP acts as a fair value benchmark, while Value Areas mark significant past trading zones that guide trading strategies. In the broader market, the S&P 500 mirrors global trends, showing stable movements in the EUR and volatile trading in cryptocurrencies. Effective trade strategies involve securing profits and managing stops to maximize gains and minimize risks. Since the market is trading below 6713, there is a clear bearish bias for derivative traders. In the short term, strategies should focus on profiting from a move towards the 6705.25 and 6702.75 targets. This might involve buying puts or opening short futures positions, using the 6716 level as a stop-loss point. However, it’s important to view this within the context of a strong bull market, with the S&P 500 rising over 16% in 2025 alone. This current weakness could just be a temporary pause or small correction. Any significant dip might offer a buying opportunity for long-term positions. **Economic Data & Market Volatility** The market’s hesitation makes sense considering recent economic data. The latest Consumer Price Index for August 2025 showed inflation steady at 3.4%, slightly above expectations, complicating the Federal Reserve’s decisions. With an upcoming FOMC meeting, many traders are waiting for clearer guidance on interest rates. Adding to the uncertainty, the CBOE Volatility Index (VIX) has risen from its lows and is now around 16. This indicates an increase in options premiums and reflects growing caution. Additionally, the cryptocurrency market crash suggests a falling risk appetite among speculators. In the coming week, traders might want to prepare for uncertainty using options. If prices stay below 6713, buying puts with near-term expirations could capture potential downward momentum. On the other hand, if buyers reclaim the 6716 level, it could indicate a continuation of the bull trend, making call options appealing. Looking ahead to the next few weeks, we should watch for potential support around the lower target of 6663. We experienced a similar consolidation in the fourth quarter of 2024 before the market made a strong advance this year. If support holds, selling put spreads below the market could be a smart way to gather premium while getting ready for the next upward move. Create your live VT Markets account and start trading now.

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The US dollar is stable after small gains last week. Interactions with the Federal Reserve are causing some ups and downs, but the dollar remains strong against major currencies. The EUR/USD pair is staying below 1.1900, while GBP/USD has dropped below 1.3500, just under its 100-day moving average of 1.3479. Currently, sellers dominate these currency pairs, but the start of the week is quiet. Today’s currency movements are minor, with changes under 0.1%. Traders are evaluating the sentiment after the Fed’s meeting, focusing on how US economic data could impact the Fed’s outlook. The market predicts about 44 basis points in rate cuts by the end of the year. There’s limited softness in the dollar, with expectations for two rate cuts of 25 basis points each in October and December.

USD/JPY Movement

Watch the USD/JPY this week. The pair is consolidating and may break from its daily moving averages. It started the week just above 148.00 and is near the 200-day moving average, which could lead to more significant movements in the forex market. The market has already factored in around two rate cuts by year-end. This sets a high bar for any further dollar weakness. Therefore, upcoming US economic data will be crucial in confirming or challenging the Fed’s dovish outlook. Traders in derivatives should prepare for movements based on data surprises, rather than just shifts in Fed commentary. The recent Consumer Price Index report from August 2025 showed core inflation stubbornly at 3.6%. This creates a data-driven environment, complicating the expectation for aggressive rate cuts in October and December. This situation brings to mind late 2023 when traders betting on an early Federal Reserve shift were caught off guard by strong economic numbers.

Strategies for Traders

For those trading major pairs, the bias towards sellers in EUR/USD and GBP/USD suggests that buying put options may be a smart move. This approach allows traders to profit from potential dollar strength if upcoming jobs or retail sales data exceed expectations. These positions offer a way to engage with defined risks while betting that the market is overestimating the Fed’s easing. The consolidation in USD/JPY, especially around its 200-day moving average near 148.00, indicates pressure for a breakout. This setup is ideal for volatility trades, such as buying a strangle with expirations set after the next big US data release. This strategy could profit from a significant market movement in either direction, which seems likely given current conditions. Since interest rate expectations drive the market, consider options on SOFR futures. With nearly two cuts anticipated, a simple strategy might be to bet on fewer cuts than the market expects. This could involve selling out-of-the-money call options on futures contracts for the fourth quarter, betting that the Fed will need to keep rates higher for longer than anticipated. Create your live VT Markets account and start trading now.

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### Speaking Engagements Throughout the Day There are several speaking events today. At 08:00 GMT, ECB’s Escriva will talk, followed by BoE’s Pill at 12:30 GMT. Then, both ECB’s Lane and Fed’s Williams will speak at 13:45 GMT. At 14:00 GMT, Fed’s Musalem will speak, followed by ECB’s Nagel at 16:00 GMT. Later, at 16:00 GMT, Fed’s Miran, Hammack, and Barkin will take the stage. Even though Miran has a dovish view, his impact is often seen as minimal. After that, BoC’s Rogers will speak at 17:15 GMT, followed by BoE’s Bailey at 18:00 GMT. The day’s speeches will wrap up with BoC’s Kozicki at 19:45 GMT. With no major data today, September 22nd, 2025, all eyes are on the central bank speakers for guidance. Last week’s Federal Reserve meeting showed a hawkish dot plot, leading to increased volatility. The key question is whether upcoming data will validate this tough Fed stance. ### Market Pricing and Uncertainty The market shows more uncertainty, as seen with the VIX index remaining around 18 after spiking from 14 following the FOMC meeting. We’ll be watching Fed speakers like Williams and the hawkish Musalem to see if they emphasize the “higher for longer” message. Any shift from this hawkish tone could cause sharp, short-term movements in interest rate futures. Tomorrow’s US PMI data is the first big test for the Fed’s position. After the August 2025 manufacturing PMI came in at a barely expansionary 50.4, a drop below 50 would challenge the idea of a strong economy and could lead to pricing in of rate cuts. This makes options that benefit from increased volatility, like straddles on the SPX, an appealing strategy before the release. On Thursday, we’ll have US Jobless Claims, which have remained low, around 215,000 for the past month. This tight labor market has been key for the Fed’s ability to maintain high rates. We saw a similar situation in 2023, where a strong job market allowed the Fed to keep raising rates, even as other areas of the economy cooled. With central bank discussions followed by important data points, traders should think about positions that could benefit from a significant move in either direction. Short-dated options on major indices or currency pairs like EUR/USD will be sensitive to any surprises this week. Today’s speeches may keep markets stable, but positioning ahead of tomorrow’s PMI data is crucial. Create your live VT Markets account and start trading now.

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Heavy selling pressure hit the cryptocurrency market at 5:59 AM GMT when the European session opened, leading to significant declines. Bitcoin dropped by more than 2% within minutes, Ethereum fell by 5%, and Solana decreased by 7% in just three minutes. This sudden market decline did not have a clear reason and impacted all cryptocurrencies. Bitcoin’s price fell to a critical level at $111,900, a price point that has seen past sell-offs. Buyers trying to capitalize on the dip are causing a small rebound. If Bitcoin falls below this level, it might reach September’s low of $107,250, and the $100,000 level could be in jeopardy. On the broader economic front, the only potential influence is the Federal Open Market Committee (FOMC) decision, which has hinted at a strict rate path. Fed Chair Powell stressed the importance of not allowing further weakening of the labor market, suggesting rate cuts could happen despite inflation being above target. This view supports riskier assets like cryptocurrencies, but short-term gains might be limited due to expectations of higher interest rates. Strong economic data from the U.S. may be needed to change this situation. The sudden price drop this morning has led to a sharp increase in implied volatility. According to data from a top analytics firm, the 30-day at-the-money volatility for Bitcoin options surged nearly 12% in just a few hours. This makes strategies like strangles or iron condors attractive if you expect prices to stabilize now. We’re closely monitoring the $111,900 level for Bitcoin, which has been a key support zone this quarter. If Bitcoin consistently breaks below this point, it could indicate more weakness, making protective puts a cost-effective insurance for any long positions. This type of sudden, catalyst-free movement is reminiscent of market conditions seen in the third quarter of 2024, leading to weeks of unpredictable trading. If support at $111,900 fails, the next target will be the September low around $107,250. Trading data from exchanges shows a 6% rise in futures open interest during the crash, indicating that new short positions are entering the market. For futures traders, this presents a clear breakdown opportunity with a tight stop-loss just above the current support level. The mixed messages from the latest FOMC meeting are causing short-term uncertainty for riskier assets. The market is torn between a strict rate path and a Fed Chair who is worried about the labor market. Until the next crucial U.S. inflation and jobs data comes out in the first week of October, trading derivatives with a well-defined risk profile is the sensible approach.

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Eurostoxx futures are stable in early European trading. German DAX futures are down by 0.1%, French CAC 40 futures are up by 0.1%, and UK FTSE futures are also down by 0.1%. Last week, European indices finished weakly, while Wall Street saw strong gains, hitting record highs thanks to tech stocks. This upward trend looks strong, with attention shifting to US data that could affect market views on the Federal Reserve. As the week starts, US futures are slightly down by 0.1%.

Pause in Market Momentum

European markets are opening flat, marking a pause in the market’s momentum. This comes after a period where US tech stocks pushed indices to new heights, while European indices lagged behind. The small decline in US futures today indicates that traders are becoming more cautious. There’s a noticeable gap between the booming US market and Europe’s slower performance. Last week’s German manufacturing PMI report for August 2025 showed a reading of 48.5, still below the growth mark, indicating contraction. This presents an interesting opportunity for a pair trade: buying call options on the Nasdaq 100 while also considering put options on the German DAX. The market’s continuous rise is fueled by hopes that the Federal Reserve will cut interest rates soon. However, with the Fed Funds rate at 4.75% and August 2025 CPI data showing stubborn inflation at 3.4%, any negative news could impact the market. Upcoming US jobs and retail sales data will be crucial to either support this rally or prompt a sharp drop.

Opportunity to Hedge

This quiet start to the week has pushed the VIX, which measures expected market volatility, down to about 14. For traders, this means options are relatively affordable right now. This is a good time to consider buying protective measures, like S&P 500 put options, to guard against potential downturns if US data turns out disappointing. We’ve seen similar patterns before, especially looking back to late 2023 and early 2024. During that time, stocks also rose sharply on the *hope* of future Fed rate cuts, well before they actually occurred. History shows that these rallies fueled by optimism can quickly reverse if economic data fails to meet expectations. Create your live VT Markets account and start trading now.

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Gold prices are steadily rising, with five weeks of gains pushing it close to $3,700. This upward trend is driven by traders buying during price dips, especially after meetings held by the Federal Reserve. The Federal Reserve’s decisions suggest that upcoming US economic data will affect what the market expects for interest rates. Key reports to watch this week include PMI data, initial jobless claims, and the PCE price index, which will be released on Friday.

Gold’s Movement

This week’s movement in gold will rely on how traders feel about the US dollar, as there are few indicators available. Even if there are some price corrections, supportive factors keep gold in a strong position. The main question is whether gold will pull back before the strong seasonal growth expected in December and January. Ongoing interest in buying at lower prices offers hope for gold’s positive trend. As gold nears the $3,700 mark after five weeks of gains, we can expect more upward movement. Any price dips are quickly being purchased, which suggests that buying call options or selling put spreads during pullbacks could be a smart approach. This allows us to benefit from rising prices while controlling our risk.

Market Focus

The market is focused on the belief that the Federal Reserve has finished raising rates, putting attention on the upcoming US data. The PCE price index, set to be released this Friday, is especially important since inflation plays a crucial role in Fed policy. The last core PCE figure for August 2025 was slightly above expectations at 2.9%. If we see another high number, it could lead to a temporary drop in gold prices. Other reports, like weekly jobless claims, will also shape how traders view the dollar. Last week, initial claims increased to 225,000, reinforcing the idea of a slowing job market and less likelihood of further Fed rate hikes. A weaker dollar continues to boost gold prices. Given the strong overall trend, the “buy on dips” strategy remains a good choice. A similar situation occurred in late 2023 when the market anticipated rate cuts, which led to a significant rally in gold beyond the $2,100 mark. What we’re seeing now seems like a continuation of that bullish trend. As a result, traders in derivatives might want to take advantage of any volatility driven by data this week to enter bullish positions. A brief correction after the PCE data could provide a good opportunity, especially as we move into the peak seasonal months for gold demand. Create your live VT Markets account and start trading now.

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