Interest rate expectations for major central banks have changed little, despite many new data reports. Year-end forecasts suggest the Fed may cut rates by 47 basis points, with a 95% chance of keeping them steady at the next meeting. The ECB is expected to lower rates by 25 basis points, with a 92% likelihood of no change in the upcoming meeting. The BoE anticipates a 50 basis point cut, with an 83% chance of a reduction soon.

Other Central Banks’ Rate Expectations

Other central banks, like the BoC, expect a 17 basis point cut but have an 89% chance of keeping rates unchanged. The RBA predicts a 65 basis point reduction, with a 92% probability of a cut at the next meeting. The RBNZ is projected to lower rates by 37 basis points, with a 75% chance of taking action soon, while the SNB expects an 8 basis point cut, with an 85% likelihood of no change. For rate hikes, the BoJ plans a 15 basis point increase, but there is a 99% chance they will maintain current rates at the next meeting. The RBNZ’s recent shift towards a dovish stance follows lower-than-expected inflation data from New Zealand, although overall expectations remain stable. Since rate expectations are firmly established, we can expect lower volatility in interest rate markets. This situation suggests that strategies profiting from time decay, like selling options, could be beneficial. However, we should stay alert for any data that might provide a strong enough reason to change current market pricing. For the Federal Reserve, the 47 basis points of anticipated cuts by year-end seem ambitious given recent data. With US inflation remaining high at 3.1% annually and Chairman Powell advising patience, there’s an opportunity to position for fewer cuts than expected. A strong jobs or inflation report could quickly change these dovish views.

Outlook for Major Economies

The European Central Bank faces a similar scenario, where President Lagarde is countering speculation about rate cuts, even as headline inflation drops to 2.8%. Her emphasis on ongoing wage growth suggests that the 25 basis points of expected cuts may be premature. We see potential in trades betting on the bank keeping rates steady longer than expected. The Bank of England and the Reserve Bank of Australia have the most aggressive easing priced in, making them likely candidates for directional trades. In Australia, inflation unexpectedly decreased to 4.1% in the last quarter, giving Governor Bullock flexibility. We believe the RBA is better positioned to make the first rate cut, making long positions in Australian government bond futures appealing. The Bank of Japan is the clear outlier, as the market anticipates a 15 basis point hike. Attention will focus on the upcoming “shunto” spring wage negotiations, which Governor Ueda sees as essential for ending negative interest rates. We should seek opportunities to position for a stronger yen or higher Japanese yields as this policy change approaches. The reassessment for the Reserve Bank of New Zealand after the weak CPI was minimal overall. Both the RBNZ and the Bank of Canada have little movement priced in, indicating that trader resources might be better allocated in markets with clearer triggers. These currencies are likely to be influenced by larger counterparts for the time being. Historically, markets tend to anticipate central bank shifts, as seen in late 2018 when traders expected Fed cuts that took longer to materialize. This history reinforces our view that current pricing for the Fed and ECB is overly optimistic. We should prepare for a situation where these central banks may disappoint market expectations soon. Create your live VT Markets account and start trading now.

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The EU aims to reach a deal with the US by August 1. At the same time, it is reviewing possible counteractions against US tariffs. Right now, the proposed retaliation targets about €72 billion of US goods. Discussions continue, and only 11 days remain until the deadline.

Meeting In Berlin

Later this week, German Chancellor Merz and French President Macron will meet in Berlin. They plan to continue their talks about tariffs after discussing them over the weekend. The rising discussions of countermeasures may lead to more market volatility. The EURO STOXX 50 Volatility Index (V2X) has been trading below 15, making options that benefit from increased uncertainty seem appealing. This situation offers a good chance to buy protection or bet on market fluctuations before the deadline. Looking back at the US-China trade tensions from 2018-2019, we observed the VIX index jump over 40% within days after tariff increases. If a deal isn’t reached by the August 1 deadline, European markets could react similarly. We expect that breakdowns in negotiations will hit export-heavy indices like Germany’s DAX particularly hard.

Opportunities In Currency Derivatives

Given the potential size of the retaliation, we are focusing on protective put options for European car and luxury goods sectors. These industries often face challenges in trade disputes and saw their stocks drop by 5-10% during previous tariff threats. The upcoming meeting between Merz and Macron will be crucial in determining how coordinated and forceful the response may be. The uncertainty surrounding a deal also opens doors in currency derivatives, especially concerning the EUR/USD pair. If tensions escalate, the Euro could weaken, as a trade dispute may harm the EU’s growth outlook more than the US’s. We see value in buying EUR/USD put options with expiration dates after the August deadline to protect against negative outcomes. Create your live VT Markets account and start trading now.

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Bitcoin has recently paused in its strong rally, even with positive US economic data and lower-than-expected inflation. Since the market’s bottom in April, growth expectations and available funds have played a big role. The upcoming August 1 tariff deadline might cause some market caution, but there are still potential positive outcomes. With few negative drivers, Bitcoin’s trend could remain upward. Futures risks include fears about growth due to tariffs or changes in interest rate forecasts. On the 4-hour chart, a solid support zone around $116,000 has held strong despite multiple attempts to break through. If Bitcoin pulls back to this support area, buyers might step in, leading to a possible rally to new highs if the support holds. However, if this support fails, sellers may target a drop to the next trendline around $110,000. Based on our analysis, we see the current consolidation as a brief pause rather than a change in trend. Recent data backs up the positive macro drivers mentioned earlier, as spot Bitcoin ETFs saw over $1.8 billion in net inflows during the first week of June 2024. This strong institutional demand is a solid floor for prices and supports a bullish outlook. Mr. Dellamotta points out that the August tariff deadline brings uncertainty, so we should be ready for possible volatility. In the past, heightened trade tensions, especially under Mr. Trump, have led to unpredictable price movements across markets. However, digital assets have sometimes gained from safe-haven flows. Therefore, derivative traders should be cautious but view significant dips from macro news as possible buying chances. For traders who share this positive outlook, we recommend buying call options with strikes above Bitcoin’s all-time high. The support zone around $66,000 is a crucial area to start these positions. Using call spreads can help define risk and capture potential profits if the market breaks out as expected. To protect against a possible breakdown, buying put options with strikes below the $66,000 support level is wise. If the market doesn’t hold this support, these positions could profit from a decline to the next support zone around $60,000. This strategy acts as a cost-effective insurance policy against unexpected growth concerns or a stricter interest rate policy. The current slowdown in momentum has reduced implied volatility, making options cheaper. We see this as a chance to build positions before the next major price movement. Buying straddles or strangles could be an effective method to trade the anticipated increase in volatility, regardless of its direction.

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The GBPUSD pair bounced back from an important support level due to US inflation data coming in lower than expected. This data did not push the US dollar to new highs, and US Treasury yields returned to levels seen before the inflation report. Currently, the market expects two rate cuts by the end of the year, with the Federal Reserve likely to keep rates steady in its next meeting. In the UK, a higher-than-expected Consumer Price Index (CPI) report initially raised expectations for a more aggressive monetary policy. However, weak employment data has kept alive the possibility of a 25 basis point rate cut at the upcoming Bank of England meeting.

Market Trends And Forecast

Traders are closely watching economic data and the upcoming tariff deadline, which may cause market disruptions if it is not postponed. On the one-hour chart, there is a potential trading range between the 1.3368 support and the 1.3480 resistance. A breakout above this range could lead to buyers aiming for a rise to the 1.36 level, while sellers might target a drop to the 1.32 level. With mixed economic signals, we believe GBPUSD will remain stable in the near term. The recent US inflation rate of 3.3% was lower than expected but did not create lasting weakness for the dollar. This supports our view that derivative markets, which see over a 60% chance of a Federal Reserve rate cut by September, are already prepared for a shift towards a more dovish stance. On the UK side, the situation is just as complicated. Although services inflation remains high at 5.9%, the unemployment rate recently rose to 4.3%, giving the central bank some leeway to ease policies. As a result, the market is pricing in a strong chance of a rate cut by August, which puts a cap on the pound’s strength.

Trading Strategies And Market Outlook

In the coming weeks, we plan to sell volatility within the 1.3368 to 1.3480 range. Strategies like selling strangles will allow us to collect premiums while the market processes the contrasting economic data from both countries. This strategy benefits from the expected sideways price movement until clearer directions for policy emerge. A breakout upwards towards the 1.36 level will likely need a significant delay in the Bank of England’s rate-cutting cycle. If upcoming UK wage or inflation data comes in unexpectedly high, we would switch to buying call options to capture that upward movement, signaling that the UK’s rate edge over the US may last longer than currently thought. On the other hand, a break below the key support level is quite possible, especially if the UK cuts rates in August while the US keeps its rates steady. Historically, when one country eases its monetary policy while another holds firm, it tends to weaken the currency of the nation that is easing. In this scenario, we would prefer buying put options targeting a fall to the 1.32 level. Traders should also keep an eye on rising trade tensions between the US and China. Any significant retaliation from China against new tariffs from Washington could lead to a global flight to safety, benefiting the US dollar and potentially pushing the currency pair below its support level, regardless of domestic data. Create your live VT Markets account and start trading now.

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European markets are mainly watching the upcoming trade talks between the US and the EU instead of focusing on the European Central Bank (ECB). Market changes are slight, with the DAX up 0.1% and the CAC 40 down 0.2%. The IBEX fell by 0.1%, the UK FTSE rose by 0.1%, and Italy’s FTSE MIB dropped by 0.8% due to Stellantis reporting a €2.3 billion loss in the first half.

Growing Trade Tensions

The EU plans to impose retaliatory tariffs on US goods totaling around €72 billion. This includes €11 billion on aircraft, €9.4 billion on machinery, €8 billion on cars, and €1.2 billion on alcohol. Both sides will meet again for talks on August 1. Increased trade tensions could harm local stock performance. While the ECB is expected to make a policy decision later this week, it will likely keep its current stance through the summer. Therefore, the ECB’s meeting will likely be less significant compared to the pressing trade negotiations, which will probably drive market sentiment more. According to analysis from Low, the biggest risk for European markets is a failure in the US-EU trade discussions. Derivative traders should prepare for higher volatility and possible declines, especially as we near the August 1 deadline. The current market uncertainty offers a chance to position for when a clear direction becomes evident. We suggest buying put options on major European indices like the DAX and CAC 40. The Euro STOXX Volatility Index (VSTOXX) is currently low at around 14, meaning options pricing does not fully reflect the potential for fear. This makes it a good time to buy protection ahead of what could be a tense negotiation period.

Impact of Trade Disputes on Stocks

Historical data indicates that trade disputes can severely impact regional stocks. For example, during the peak of the 2018 trade war, the export-driven German DAX fell over 18% in six months as tariffs were implemented. A similar negative reaction could occur if current negotiations fail. Traders should also focus on specific sectors mentioned in the proposed tariffs. Since the EU’s list includes autos, machinery, and aircraft, buying puts on leading companies in these industries can be a smart way to hedge. The recent drop in Stellantis stock demonstrates how quickly market sentiment can shift for exposed companies. The ECB’s expected inaction clarifies our outlook. With monetary policy likely on pause this summer, the focus shifts away from interest rate speculation and centers on the trade discussions. This makes the trade negotiations the key factor for market movements in the coming weeks. Create your live VT Markets account and start trading now.

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Ethereum doesn’t appear to be waiting for the next bull market to start making moves. While Bitcoin continues to dominate the headlines and capture the spotlight in terms of price action, the real transformation is unfolding quietly in the regulatory corridors of Washington. Three significant pieces of crypto legislation are making their way through the US Congress. They may be technical and hard to digest, but collectively, they could reshape Ethereum’s role in the global financial system.

President Trump on Friday signed into law a bill that establishes the first federal framework for dollar-backed stablecoins, one of the biggest victories yet for a crypto industry. pic.twitter.com/2vJ0fIRTIJ

— Yahoo Finance (@YahooFinance) July 18, 2025

The GENIUS Act, the CLARITY Act, and the Anti-CBDC Act might not sound thrilling, but together they could place Ethereum at the heart of the next regulated crypto era. And here’s the critical point: Ethereum stands to benefit more than any other blockchain, including Bitcoin.

GENIUS Act: Not Just Clever Branding

Let’s begin with the GENIUS Act, which is all about tidying up the stablecoin ecosystem. It would mandate full reserve backing, comprehensive audits, and improved user protections. While that may seem like regulatory red tape, for Ethereum, it’s a welcome boost.

The vast majority of stablecoins, such as USDC, USDT, and PYUSD, are built on Ethereum’s ERC-20 framework. These tokens depend on Ethereum for issuance, transactions, and network support. With legal clarity, institutions can finally participate without fear of regulatory pitfalls. And when they do, they’ll almost certainly utilise Ethereum’s infrastructure.

Bitcoin, for all its strengths, lacks the smart contract capabilities to host stablecoins at scale.

CLARITY Act: Ethereum Steps Out Of The Shadows

The CLARITY Act is arguably the most significant of the three. This proposed legislation would officially designate ETH as a commodity, placing it under the jurisdiction of the Commodity Futures Trading Commission (CFTC), rather than the Securities and Exchange Commission (SEC).

This change matters. Ethereum’s legal status has remained uncertain, particularly following its transition to proof-of-stake. The SEC has long implied ETH could be classified as a security, causing unease among investors. The new law would erase that ambiguity, giving institutions the all-clear to get involved without fear of enforcement actions.

Bitcoin, for comparison, never faced this uncertainty. It has always been treated as a commodity. So while this act strengthens Bitcoin’s standing, it effectively liberates Ethereum from its regulatory limbo.

The Anti-CBDC Act: An Unexpected Win For Ethereum

The third bill, the Anti-CBDC Act, might seem unrelated at first glance. It essentially blocks the Federal Reserve from launching a central bank digital currency (CBDC), such as a digital dollar. But this is indirectly great news for Ethereum.

Why? Because it keeps the path open for private stablecoins to remain the dominant option for digital USD transactions. And since the bulk of these stablecoins reside on Ethereum, the network stands to gain further dominance.

Sure, networks like Solana, Tron, and Binance Smart Chain also support stablecoins. But Ethereum still offers the deepest liquidity, the most mature infrastructure, and the largest DeFi ecosystem by far.

Even when stablecoins bridge to other chains, their foundational layer and most significant liquidity pools tend to remain on Ethereum. Institutions also generally place greater trust in Ethereum’s decentralisation, longevity, and security. These are traits that become increasingly important in a regulated environment.

Ethereum’s Foundational Advantage

Markets are already beginning to take notice. ETH has outperformed BTC in several recent sessions, a trend that may continue as the regulatory momentum builds. That said, legislation alone doesn’t guarantee price gains. Traders will want to see actual adoption such as rising stablecoin volumes, new institutional products, or fresh innovation in decentralised finance.

And of course, these bills haven’t yet become law. Political delays, amendments, or resistance could disrupt the timeline.

Still, the groundwork is forming. Should the legislation pass, Ethereum would no longer be just a decentralised smart contract platform. It would become the regulatory backbone for US-based digital finance. It would process tokenised dollars, anchor compliant staking products, and support enterprise-grade DeFi.

This marks a sharp divergence from the traditional ETH-versus-BTC narrative. Bitcoin may remain the champion of digital gold, but Ethereum is fast becoming the infrastructure layer for everything else.

Strategically speaking, this positions ETH as an attractive candidate for medium-term accumulation. Traders focused on macro correlations should monitor stablecoin inflows, CFTC commentary, and total value locked in DeFi. If the regulatory doors swing wide open, the capital will flow in, and Ethereum will be waiting.

Market Movements Of The Week

The US Dollar Index (USDX) inched upwards from its 98.50 retracement zone. Resistance at 98.75 remains active, with targets around 99.85 and 100.15 emerging if momentum persists. The dollar’s strength now seems underpinned by structure, buoyed by soft eurozone PMIs and a resilient US economy. That said, a disappointing GDP or Core PCE print next week could halt this climb. Until then, the bias remains modestly bullish.

EURUSD reflected this narrative, softening toward the 1.1480 zone, a key area for bullish setups. With limited PMI optimism, euro strength looks shaky. If USD gains momentum into next week’s macro data, a clean break lower could expose the 1.14 region.

GBPUSD dropped below the 1.33645 swing low, now crawling towards the 1.3315 support. If the pair consolidates here, another leg down toward 1.3215 could follow. Traders should watch for bullish reversal patterns, but with Bailey due to speak and no major UK data releases, sterling might simply track broader dollar trends.

USDJPY edged toward 149.20, a crucial resistance point. Should this level break, bulls might aim for 149.95. However, the Bank of Japan’s upcoming policy statement will be decisive. A dovish stance could lift the pair, while any tightening hint may cause a sharp correction.

USDCHF retraced from 0.8050, yet another push toward 0.8115 remains possible. The pair appears to be waiting on a broader dollar breakout. Should USDX breach 99.85, CHF could weaken further.

AUDUSD and NZDUSD both slipped from their monitored zones, 0.6520 and 0.5985, respectively. For AUD, 0.6485 is the next key level to test. Should we see consolidation there, a deeper move lower could unfold. Likewise, NZDUSD is approaching 0.5930. These levels matter. Both currencies remain vulnerable to dollar strength and soft commodities, so risk-off sentiment or poor China data could drag them further.

USDCAD moved higher from 1.3715. If this rally continues, 1.3810 and 1.3840 are the next resistance levels to monitor for bearish setups. With CAD tethered to oil’s volatility, it’s worth watching crude as a cross-reference. A strong oil bounce could cap this pair, but weakness in energy might lift it further.

USOil pulled back, with 63.35 and 61.00 acting as the next key demand zones. If price stabilises there, bulls may step back in. But current sentiment feels tentative. Without a geopolitical spark or inventory draw, oil may drift or consolidate through the zones, rather than spike sharply.

Gold tested the 3340 level and still appears to have upward momentum. If it pushes through to 3380 and 3410, sellers may re-enter. Monitor for signs of exhaustion at these levels, as momentum is still closely tied to real interest rates and the dollar.

The S&P 500 reached a new high, approaching the 6400 mark. If bullish momentum continues, 6630 is the next target. However, with earnings season beginning and the Fed on the horizon, traders may shift to a more defensive posture above 6400 unless supported by breakout volume.

Bitcoin couldn’t hold above the 120,350 mark, failing to close strong. The pullback brings 113,345 and 111,000 into focus for potential bullish setups. If those levels show strength, short-term buyers may look for re-entry. However, ETH’s recent rejection at 6,773 and signs of outperformance are beginning to shift attention across the majors.

Natural gas continues to hold traders’ interest. If it consolidates near 3.26, bulls may eye a run at the 3.615 high. Seasonality and weather volatility remain key catalysts, so traders should stay nimble. A clean breakout above 3.615 would change the structure entirely, but only if volume confirms it.

Key Events Of The Week

On Tuesday, 22 July, all eyes will be on Bank of England Governor Andrew Bailey. With GBPUSD under pressure and drifting near 1.3315, any dovish tilt in tone could increase downside risk. No rate change is expected, but the rhetoric will be closely analysed.

Thursday, 24 July, is packed with data. RBA Governor Michele Bullock will speak while AUDUSD hovers near 0.6520. With no formal rate decision, traders will dissect every word. A cautious tone could drive AUD toward 0.6485, while hawkish comments might give it a brief lift.

Shortly after, Germany’s flash PMIs arrive. Manufacturing is forecast at 49.4, just above last month’s 49.0, with services at 50.0. These are marginal improvements, so surprises may impact the euro sharply. Weakness here could push EURUSD toward 1.1480.

The UK’s own PMI data follows closely. Manufacturing is expected at 48.1, up from 47.7, and services at 52.9, a tick above the previous 52.8. This leaves sterling in a tight spot. A miss, especially on the services side, could push GBPUSD through 1.3315 and test support at 1.3215. Traders should be watching for bullish patterns at those levels if consolidation appears.

The ECB’s main refinancing rate decision lands later in the day. No surprises are expected here—the rate is forecast to hold steady at 2.15%, unchanged from last month. But the press conference that follows could offer the bigger takeaway. Markets are anticipating one final rate cut in September to wrap up the easing cycle. Any comment that supports or challenges that outlook could inject some movement into EUR crosses.

Finally, US flash PMIs round out the session. Manufacturing is projected to dip slightly to 52.7 from 52.9, while services are expected to rise to 53.0 from 52.9. The data won’t change Fed policy on its own, but with the FOMC press conference and Core PCE around the corner next week, it could shift sentiment. If the numbers beat expectations, it may help the dollar extend gains, particularly if USDX breaks out above the 99.85 level.

Looking ahead, next week could bring heavier macro winds: US Advance GDP (30 July), CAD Overnight Rate, FOMC Press Conference, Core PCE Price Index, Japan’s Monetary Policy Statement, and US Non-Farm Employment Change (1 August). For now, though, all eyes are on Thursday, a day dense with data, tone shifts, and short-term trading opportunity.

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The latest ECB survey shows that inflation expectations for the next year have fallen to 2.5%, down from 2.9%. Expectations for inflation in three and five years remain steady at 3.0%. Many companies report that trade tensions are affecting their operations, especially those exporting to the US. While 23% of businesses are optimistic about the upcoming quarter, they also note a decrease in profits.

Market Reactions To ECB Position

These developments are not expected to change the ECB’s current stance, as they are still gathering more data. The market anticipates one last interest rate cut by the end of the year. According to the survey highlighted by Dellamotta, we should prepare for a more cautious European Central Bank. The drop in one-year inflation expectations is a notable sign of this. However, a recent flash estimate from Eurostat shows that headline inflation increased to 2.5% in June, creating mixed signals for policymakers. This situation favors yield curve steepener trades, which are based on the differences between short-term and long-term interest rates. While the market has largely accounted for a high chance of another rate cut, falling profits could push the central bank to act more aggressively than expected. Historically, central banks tend to make deeper cuts than initially planned when an easing cycle starts to tackle a slowing economy.

Currency Strategies In Light Of ECB Moves

With the central bank’s plans to gather more information over the summer, we anticipate lower immediate volatility. This suggests that selling short-dated options to collect premium could be a smart move, as major policy changes are unlikely until September. However, we should be ready for increased volatility as important inflation reports and policy meetings approach. The strain on corporate profits and the clear reference to trade tensions with the US should influence our currency derivative strategies. These factors combined with the possibility of ECB rate cuts happening faster than those from the Federal Reserve suggest a bearish outlook for the Euro. We might consider buying puts on the EUR/USD or creating other bearish strategies to benefit from a potential decline towards the 1.05 level seen earlier this year. Create your live VT Markets account and start trading now.

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Gold futures are currently at $3,373.5, marking a consolidation phase today. This level is impressive, reflecting a 37% increase over the past year. The intraday range is between $3,351 and $3,378.3, with a notable 50-week high of $3,509.9. According to tradeCompass, key levels to watch are bullish above $3,354.2 after a re-cross and bearish below $3,387.5 after a failure. Today’s market indicates that traders should be cautious near the upper intraday levels. Bearish opportunities could arise if prices reach $3,387–$3,388 and then retreat. The tradeCompass strategy suggests activating bearish trades if prices dip below $3,387.5. For these trades, partial profit targets range from $3,382.7 to an extended target of $3,328.4.

Technical Analysis Insights

For a bullish trade, prices need to drop below $3,354.2 and then rise above it again. Partial profit targets for this strategy would be between $3,359.8 and $3,386.7. Using tools such as Volume Profile, tradeCompass simplifies identifying potential turning points and improves entry and exit strategies. This helps traders understand market conditions and make better decisions. Risk management is crucial. Limit yourself to one trade in each direction per session and adjust your stops after achieving partial profit targets. TradeCompass acts as a supportive decision tool, helping traders navigate key levels without making forecasts or offering financial advice. Given this analysis, we should view gold’s recent sideways movement as a consolidation rather than weakness. The market is taking a breather, which means traders need to switch from trend-following to range-trading strategies. This pause offers opportunities for agile traders who concentrate on defined levels. The strong long-term bullish case is backed by solid demand fundamentals, particularly central bank purchases. The World Gold Council noted that central banks added over 1,000 tonnes to their reserves for two years straight in 2022 and 2023. This trend creates strong support levels that investors are likely to defend.

Options Trading Strategies

For options traders, the current consolidation phase suggests selling premium could be a smart choice. As gold stays within a steady range, implied volatility tends to decrease, making strategies like iron condors or selling strangles appealing. One possibility is to sell call options above the $3,387.5 resistance while selling put options below the $3,354.2 support to profit from the expected stability. Futures traders should set aside hopes of catching a strong rally and instead focus on reactions at key levels. We’ll be monitoring if the price approaches $3,387.5 and fails, providing an essential trigger for a short entry. Remember to take profits at set targets rather than hoping for a bigger drop. Historically, gold has often gone through long consolidation periods after substantial price increases, like the phase after the 2011 peak when the market moved sideways for months. This pattern frustrated breakout traders but rewarded those who took advantage of the range. We need to prepare for a similar situation now, using the identified levels as our guide for the coming weeks. While the bearish strategy seems more pressing, we can’t overlook potential bullish setups. If sellers push the price below $3,354.2 but buyers quickly regain that level, it signals strong rejection of lower prices. This would be our signal to open a long position, employing a disciplined approach to take partial profits as the price rises back through the range. Create your live VT Markets account and start trading now.

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As of July 18, the Swiss National Bank (SNB) reported total sight deposits of CHF 475.3 billion, up from CHF 464.1 billion. Domestic sight deposits increased to CHF 444.8 billion from CHF 434.9 billion. This growth in sight deposits is due to financial institutions looking for safety from negative interest rates. After the recent rate cut, the Swiss Average Rate Overnight (SARON) dropped to between -0.03% and -0.04%. As a result, keeping reserves with the SNB has become a more appealing choice.

Market Reactions to Rate Cut

The increase in sight deposits directly reflects financial institutions reacting to the central bank’s recent rate cut. This indicates that there is extra cash in the system and confirms that the policy is successfully pushing short-term rates into negative territory. This liquidity will likely influence the market in the coming weeks. For traders involved in interest rate derivatives, this information supports the idea that Swiss rates will stay low. SARON futures are already indicating a negative rate environment for the rest of the year, with some traders even considering a further cut by December. We think that strategies benefiting from steady or falling short-term rates, like selling Swiss franc interest rate futures, are well-positioned. This monetary policy approach may put pressure on the Swiss Franc. Historically, periods of rate cuts tend to weaken the franc. For example, after the rate cut in June 2024, the EUR/CHF exchange rate rose from 0.95 to over 0.98. Therefore, using options to bet on a higher USD/CHF or EUR/CHF exchange rate could be a good idea.

Impact on Swiss Equities

The low-interest-rate environment is likely to support Swiss equities. Lower borrowing costs can enhance company earnings and make stocks more appealing than cash, which is now earning negative returns. The Swiss Market Index is already up nearly 6% since the last policy easing. We believe selling out-of-the-money put options on the index is a smart way to collect premium. Create your live VT Markets account and start trading now.

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Gold has remained steady after US inflation data came in lower than expected. Investors are taking defensive positions because of possible tariff issues, even though tariff deadlines may be delayed. With real yields decreasing due to potential easing by the Fed, gold is likely to trend upwards. However, if interest rates take a unexpectedly hawkish turn, we might see some short-term dips.

Technical Analysis

In the daily chart, gold bounced back from an important upward trendline. Buyers are aiming for a rally towards the 3438 resistance level, while sellers are looking for a break below the trendline to reach near 3120. The 4-hour chart shows minor resistance around 3377, with sellers expecting a dip below the main trendline and buyers targeting a rise to 3438. On the 1-hour chart, a minor upward trendline supports positive momentum. Buyers will likely defend this trendline in hopes of breaking through minor resistance, while sellers will aim to push prices below this line, looking for a major trendline breakout. Coming up are important events like Fed Chair Powell’s speech, US Jobless Claims, and the flash US PMIs, which could impact gold prices.

Recent Data and Strategies

The recent US Consumer Price Index data, which was lower than expected at 3.3% annually, signals cautious optimism. Derivative traders might consider buying call spreads to bet on price increases while limiting downside risk. Current market pricing indicates over a 65% chance of an interest rate cut by September, reinforcing this bullish outlook. Concerns about tariffs also support the view of gold’s potential rise. During the 2018-2019 trade disputes, gold increased over 20% amid rising global uncertainty, which sets a precedent for the current situation. Selling out-of-the-money put options may be a good way to collect premiums since these geopolitical issues should provide price support. From our viewpoint, the major upward trendline is crucial for any strategy. A bull put spread with the short strike below this trendline is a solid way to earn income while maintaining a bullish stance. If the price falls below that critical level, it signals us to exit bullish trades and consider buying puts to target a drop towards the 3120 support area. The upcoming remarks from Powell and the latest jobless claims could lead to short-term price fluctuations. With initial claims recently reaching a 10-month high, any evidence of further labor market weakness could push prices through the minor 3377 resistance. Traders might buy short-dated call options to take advantage of a possible breakout with minimal capital at risk. Create your live VT Markets account and start trading now.

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