**International Market Factors** Gold prices began to rise sharply in late August. This increase was driven by Trump’s efforts to shape US monetary policy towards a more lenient approach. This push has also lifted both gold and stock markets to new highs. Additionally, weak US economic data has led to expectations for lower interest rates and a weaker US dollar. Globally, the ongoing conflict in Ukraine continues to create market uncertainty. Although there was a productive meeting between the US and China, the anticipated effect on gold prices from trade talks has not happened, with no clear changes in tariffs. **Trade Strategies and Derivatives** As gold prices increase dramatically, traders should prepare for more upward movement and heightened volatility. The CBOE Gold Volatility Index (GVZ) has jumped to over 30, a level not seen since early 2024’s market unrest. In this environment, buying long-term call options, such as those for January 2026, offers a smart way to leverage potential gains while managing risk. The drive for a softer monetary policy is the main influence here, and the derivatives market reflects this strong expectation. Fed fund futures indicate a 90% likelihood of a 50-basis point interest rate cut at the next FOMC meeting in October. Similar expectations for rate cuts in late 2023 preceded substantial gold price rises. This outlook is supported by a weakening US dollar, which recently fell below the important 95.00 mark on the DXY for the first time in over two years. A softer dollar boosts gold prices. Therefore, we recommend using bull call spreads on gold futures to lower entry costs in this volatile environment. The ongoing conflict in Ukraine also solidifies gold’s status as a safe-haven asset, making aggressive short-selling less appealing. Furthermore, we’re noticing a significant rise in open interest for December 2025 (GCZ5) gold futures contracts, indicating that new investors are entering the market to benefit from this trend. This accumulation of positions shows strong bullish sentiment. For those managing larger portfolios, the simultaneous record highs in both stocks and gold create a unique hedging opportunity. Buying gold put options or even VIX calls can act as an affordable form of portfolio insurance. Should risk sentiment shift sharply, gold could soar further as investors seek safety, even if stocks start to decline. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Tech Sector Gains

Tapestry shares rose by 4.34%, thanks to consumer spending. Intel climbed by 4.05%, driven by trends in the chip industry and AI. Alphabet A gained 3.65% due to strong ad revenue and AI growth. Oracle increased by 3.28% from cloud and AI services, while GameStop went up by 3.07% due to retail interest. The S&P index gained 31 points, or 0.47%, reaching 6,614.69. It briefly touched 6,619.62 but didn’t break any records set by the NASDAQ. Meanwhile, the Dow industrial average fell 48 points, or 0.11%, to 45,787.66 due to losses in companies like Amgen and McDonald’s. The Russell 2000 index rose by 7.69 points, or 0.32%, hitting 2,404.73. The NASDAQ is showing strength while the Dow is declining, creating a noticeable split in the market. This indicates a shift towards high-growth tech stocks, moving away from older industrial companies. Traders should pay attention to this trend, as the momentum is clearly in the tech sector. This tech rally is backed by signs of easing inflation. The August 2025 CPI report showed a 2.9% increase, which is slightly below the expected 3.0%. Traders now think the Federal Reserve will keep rates steady at the next meeting, a scenario that favors growth stocks with long-term earnings. This environment is positive for riskier tech assets.

Market Strategies

The current market behavior is similar to the shift we observed in late 2023 when the Fed hinted it would stop raising rates. Back then, the NASDAQ rose for months while the Dow lagged. History suggests this trend of tech outperforming could continue for several more weeks. Given the strong gains in companies like Tesla and ASML, it makes sense to consider buying near-term call options to take advantage of this momentum. Tesla has surged after an insider buy, and while implied volatility is high, the direction seems strong enough to justify the cost. Selling put credit spreads on leading firms like CrowdStrike could also be a smart way to earn premium while remaining bullish. To guard against market uncertainty, we might focus on the underperforming Dow Jones. Buying puts on an index ETF like DIA or on specific laggards like 3M can help protect our tech investments. This creates a pairs trade that profits from the growing performance gap between the two indices. The strength of retail favorites like GameStop and Chewy indicates a strong appetite for risk among investors right now. This widespread optimism supports aggressive short-term strategies but may also suggest the market is becoming overheated. We should stay flexible with our positions and be ready for potential increases in volatility. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

The AUDUSD went up during the Asian session, hitting a high of 0.66683 on Friday. However, this level acted as resistance, causing a slight pullback. This drop indicates a possible double top pattern, giving sellers an advantage in the ongoing bullish trend that began on August 22. Sellers are looking to keep their stop-loss orders just above 0.6668 while aiming for a more significant drop.

Sellers Aiming for Targets

Staying below 0.6668 gives sellers short-term power, but they need to continue building their position. The first target for a downward move is the 100-hour moving average at 0.66293, which supported prices during Thursday when US job numbers disappointed. If the price falls below the 100-hour moving average, the focus will shift to the 200-hour moving average at 0.65917. On the other hand, breaking above 0.6668 would invalidate the double top pattern, giving an edge to buyers and possibly pushing them to test the November 2024 high of 0.6687. This high is also in line with a trendline on the daily chart, making it a crucial target for upward movement. We are monitoring the AUDUSD as it tests the resistance near 0.6668, a level that has remained strong today. This rejection is forming a potential double top on the charts, signaling a clear opportunity for traders. Those looking to short the market may enter positions with a tight stop-loss just above this key resistance.

Bearish View Backed By Economic Data

This bearish outlook is supported by recent economic data from Australia. The quarterly inflation rate in August 2025 fell to 3.1%, slightly lowering expectations for another RBA rate hike. Meanwhile, comments from US Federal Reserve officials highlight their commitment to fighting inflation, suggesting the US dollar may continue to strengthen. These factors indicate that the current resistance may hold. The first important level to monitor on the downside is the 100-hour moving average at 0.66293. This level provided support during last Thursday’s trading session before a rally due to weaker US jobless claims. A solid break below this moving average would indicate increasing selling pressure. If sellers breach that initial support, their next target will be the 200-hour moving average at 0.65917. Hitting this level would indicate a significant change in market sentiment, similar to trends we saw in late 2023 when a persistent hawkish Fed led to strong US dollar performance. However, we need to be ready for a bullish breakout if sellers can’t maintain their position. A substantial move above the 0.6668 resistance would nullify the double top pattern and put buyers in control. This shift could be aided by strong commodity prices, as iron ore has recently risen above $120 per ton. If prices break higher, the main target would be the November 2024 high at 0.6687. This level is critical as it aligns with a significant upward trendline on the daily chart. A move to this area would confirm that the uptrend that began in late August 2025 is still going strong. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

European countries are being asked to help with Russian oil sanctions. The United States is considering stronger sanctions against Russia, depending on similar actions from Europe. Discussions between China and the US might extend the current tariff truce for another 90 days. Chinese negotiators know it’s important to reduce trade risks with the US to avoid a complete separation in the next 3.5 years.

TikTok Sale and Russian Oil Sanctions

China has asked for compensation related to the TikTok sale, including tariff and export control benefits. There is doubt about new sanctions on Russian oil, even though WTI crude has increased by 70 cents to $63.39, remaining at the low end of its range. We think the immediate risk of new tariffs between the US and China is decreasing for now. The possibility of another 90-day tariff truce suggests calmer times may be ahead. As a result, market volatility has reduced, with the VIX index falling from over 22 earlier this month to about 18.5 today. In the energy markets, the reluctance to impose new sanctions on Russian oil helps stabilize prices. After the supply shocks of 2023, West Texas Intermediate crude has stabilized in a $60-$70 range for most of 2025. Last week’s EIA report showed a surprising increase in crude inventories, making a significant price spike less likely in the near future.

Equity Index Derivatives Favorable Environment

This situation might be good for equity index derivatives, as a pause in trade tensions eases pressure on corporate earnings. The S&P 500 has already risen over 60 points in the last five trading days. There is notable interest in call options on technology and industrial sector ETFs, which are sensitive to US-China relations. China’s long-term plan to reduce reliance on the US suggests they will likely prioritize stability in the short term. This aligns with their focus on strengthening the domestic economy, as seen by the stronger-than-expected 4.5% increase in retail sales in August 2025. While tensions still exist, we can expect negotiators to take a more careful approach. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Canadian companies are investing less in industry than ever before, with spending on industrial machinery and equipment hitting its lowest level since 1981. Since 2015, Canada and the US have diverged in their investment trends, creating a growing gap each year. Economists point to a few reasons for this decline. Heavy regulations, a lack of government support for transforming natural resources domestically, and protectionist policies from the US are all factors hurting Canada’s manufacturing sector.

Increasing Military Spending

There are suggestions that boosting military spending could benefit Canadian industry. However, experts argue for a broader strategy that includes a more competitive tax system, reduced regulations, and clear laws for natural resource development to truly solve these issues. The ongoing weakness in Canadian industrial investment compared to the US is a significant problem for our economy. This trend sharply diverged after the oil price drop in 2015 and has continued to negatively impact the Canadian dollar. The most recent manufacturing PMI report for August 2025 shows a contraction at 48.5, meaning there’s little reason to expect a reversal of this long-term currency weakness. For derivative traders, this indicates a bearish outlook on the Canadian dollar against the US dollar. Strategies like buying USD/CAD call options or selling CAD futures could be effective, as the lack of decisive action from Ottawa fails to provide a catalyst for change. The current exchange rate of around 1.41 seems at risk of further decline, especially as the US benefits from earlier industrial policies. This underperformance also affects Canadian stocks, particularly in industrial and manufacturing sectors. Implied volatility for options on the S&P/TSX 60 index is higher than for similar US options, making protective puts a wise choice for anyone invested in Canadian equities. Most capital entering Canada is likely to focus on the resource sector, which is also hindered by limited domestic processing investments.

Potential Policy Announcements

We should keep an eye out for any government announcements regarding tax competitiveness or deregulation, as these could be potential turning points. However, years of inaction mean that any new policy promises may just serve as a chance to “sell the news.” A brief rally in the Canadian dollar or the TSX following such news could provide a better opportunity to reinstate bearish positions. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

US stock indices are up due to positive expectations for a US-China trade deal. Both the S&P 500 and NASDAQ Composite have reached new all-time highs. The Dow Jones Industrial Average has also increased but is still below its previous peak of 46,137.20. In early trading, the Dow Jones rose by 93 points to 45,926.77, up 0.20%. The S&P 500 gained 30 points, a rise of 0.46%, ending at 6,614.50, just shy of a new all-time high. The NASDAQ Composite increased by 140 points, a 0.63% gain, reaching 22,281.47, close to its record high.

Tesla’s Stock Performance

Tesla is in the spotlight with a significant rise in its shares. The stock is up $22.79, or 5.78%, now valued at $418.90. This comes after a breakout last week when shares closed above the previous resistance level of $367.71. This upward trend is fueled by news that Elon Musk bought about $1 billion in Tesla stock. This news has created a strong positive momentum, with target prices now at $420 and $440, which are important levels for Tesla shares. While the market is reaching all-time highs due to hopes of a trade agreement, we should remain cautious about a “sell the news” scenario. We experienced similar situations during the 2018-2019 trade disputes, where initial optimism faded if no solid deal was made. Given that the VIX volatility index might be low, around the 13 level seen in mid-2024, buying protective puts on the S&P 500 could be an affordable way to protect against a potential decline. This environment is a good opportunity to think about strategies that could benefit from a slowdown in momentum or a minor decline. Selling out-of-the-money call credit spreads on indices like the SPX or NDX allows us to gather premiums while the market processes this news. This strategy bets that the initial enthusiasm won’t push the indices much higher in the short term.

Trading Strategies for Tesla

Shifting focus to Tesla, the surge driven by Elon Musk’s stock purchase is a strong, news-fueled momentum play. The stock is reacting vigorously, breaking key resistance levels. Such movement attracts speculation, pushing prices toward psychological targets like $420. For traders looking to take advantage of this momentum, implied volatility on Tesla options is likely spiking, making them quite pricey. History shows, like with the major volatility swings in August 2018 after Musk’s tweets, that high option costs can eat into profits even if the stock moves favorably. A recent analysis from early 2025 revealed that Tesla’s 30-day implied volatility averaged over 60%, much higher than other large-cap stocks. Due to these high costs, a more defined-risk approach is advisable, such as a call debit spread. For instance, buying a $420 strike call while selling a $440 strike call can cap potential gains but significantly lower initial costs. This strategy allows for upside participation while shielding against the typical drop in volatility that follows major news events. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

The USDCHF fell today due to disappointing US Empire manufacturing data. This push brought the pair down to a low of 0.7945, sparking new buying interest. This level sits within a swing area that stretches from 0.79382 to 0.79471. This zone has previously attracted buyers and provided support once more, leading to a slight bounce.

Key Reference Point

The range from 0.79382 to 0.79471 is essential for market players: – If the price drops below 0.79382, it could lead to more declines, potentially reaching 0.7910 to 0.79209. – On the upside, short-term resistance is found at 0.79556, which is a former swing low from September 5, close to today’s Asian session low. A steady move above 0.79556 might shift focus upward, specifically toward the 100-hour moving average at 0.79698. Right now, the market is stuck between these key levels, with traders waiting for a clear break to decide the next trend. The US dollar is weakening against the Swiss franc due to the New York Empire State Manufacturing Index, which reported a disappointing -8.5. This suggests the US economy is slowing down, raising concerns about the Federal Reserve’s next steps and putting pressure on the dollar. For those expecting further US economic decline, the 0.79382 level is crucial. A break below this level would indicate a stronger downward trend. A good strategy could be to buy put options with a strike price around 0.7925, aiming for profit-taking in the 0.7910-0.7920 range.

Market Positioning and Strategy

On the other hand, the Swiss National Bank has already cut its policy rate to 1.00% earlier in 2025. Any surprising strength in upcoming US data could lead to a sharp reversal. Traders betting on a dollar rebound should look for a move above 0.79556. Buying call options with a strike near 0.7970 would be a sensible approach to target the 100-hour moving average. The market is currently signaling uncertainty, caught between contrasting central bank views. Reflecting on similar periods of consolidation in late 2024, implied volatility typically decreased before a big breakout. This environment might be perfect for strategies like selling a short strangle or an iron condor to collect premium while the pair stays between key support and resistance levels. Overall, price movement is confined within a narrow range of about 0.7940 to 0.7970. We will be watching the upcoming US jobless claims data later this week for the next catalyst. Until one of these key levels breaks, taking large directional positions carries significant risk. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Tesla shares have risen by 7% for the third day in a row. This increase follows Elon Musk’s purchase of $1 billion in shares, significantly boosting the value of his investment. Analysts expected a technical breakout after the shares climbed above May’s high and showed a pattern of higher lows. This upward trend aligns with a broader market context, highlighted by a 40% jump in Oracle shares, signaling caution for those betting against tech companies. Tesla’s stock is now nearing last year’s high of almost $488. The market seems less focused on traditional metrics, instead concentrating on momentum, particularly around full self-driving and robotics. At this moment, auto sales, profit margins, and earnings appear to be secondary. The current trend shows how powerful narratives and market sentiment influence share prices. The breakout above May’s high is the strong bullish signal we anticipated, and it’s materializing. With the stock price climbing, momentum is the primary concern, so we should prepare for further gains. Traders in derivatives should concentrate on bullish strategies in the coming weeks. Elon Musk’s recent share acquisition is driving this surge, proving that the current rise is more about his vision than vehicle sales data. The market is favoring the narratives of full self-driving and robotics, meaning traditional fundamentals can be overlooked for now. This positive sentiment is visible in the options market, where call option volume has spiked by over 150% from the August 2025 average, reaching more than 2 million contracts daily. This surge in speculation can lead to a short squeeze. Notably, the latest report from the Bureau of Economic Analysis showed a small 0.2% drop in U.S. auto sales last month, further illustrating the disconnect from fundamental data. This situation resembles the meme stock rallies of 2021, where stocks strayed from reality for long periods. Historically, attempting to short such strong, narrative-driven momentum has proven to be a costly misstep. The easiest path forward seems to be upward toward last year’s peak of about $488. With implied volatility in near-term options exceeding 80%, buying calls outright has become quite pricey. Instead, we should consider using call debit spreads to lower entry costs and manage risk. This approach allows us to benefit from further gains while safeguarding against volatility if the rally loses steam.

here to set up a live account on VT Markets now

US stock markets are ready for a strong start to the week. S&P 500 futures rose by 20 points, or 0.3%, after a flat close on Friday. Recent positive news in US-China relations, such as a deal on TikTok and a scheduled call between President Trump and Xi Jinping, has boosted optimism.

Federal Reserve Survey and Tesla Performance

The New York Federal Reserve’s manufacturing survey feels weak, but many see it as a sign that interest rates may be cut rather than a warning of an upcoming recession. Tesla stands out in pre-market trading, with shares up 7%. This increase follows Elon Musk revealing he bought $1 billion worth of Tesla shares, his largest purchase yet. A similar trend is emerging in the markets this week. Reflecting on the sentiment during the Trump administration, with its emphasis on US-China relations, reminds us that geopolitical news can create short-term volatility in trading. As of September 2025, news about technology export controls is causing sharp market reactions, similar to the TikTok discussions in the past. Market reactions to economic data also resemble previous patterns, where disappointing numbers were often viewed positively for stocks. The August 2025 Consumer Price Index (CPI) report shows core inflation stubbornly at 2.9%. Traders are now closely watching for signs of an economic slowdown and positioning themselves for a potential dovish shift from the Federal Reserve. They are buying calls in interest-rate-sensitive sectors ahead of upcoming unemployment data.

Market Dynamics and Hedging Strategies

Single-stock movers like Tesla remain a significant part of the market. While a major insider purchase was the catalyst before, today it’s fueled by advancements in autonomous driving and new battery technology announcements. Tesla’s 30-day implied volatility is near 55%, much higher than the S&P 500’s VIX reading of 16, making options strategies like straddles popular ahead of major company events. In this environment, traders are using options on broad indexes like the SPX to protect against surprises from the Federal Reserve or geopolitical events. The cost of protection is moderate, and many traders are selling credit spreads to earn premiums from expected range-bound trading around significant data releases. This reflects a cautious but opportunistic approach, taking advantage of volatility in specific companies while managing overall market risk. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

The USDCAD currency pair is falling, mainly due to strong Canadian manufacturing sales and a weaker US Empire manufacturing index. Right now, the pair is testing important moving averages: the 100-bar at 1.3814 and the 200-bar at 1.38067. The lowest point this session reached was 1.38144. This area is crucial for both buyers and sellers. Buyers hope to bounce back from this level, while sellers want to break below it to push prices down. Even with the downtrend, the pair has struggled to stay above last week’s swing range of 1.3878 to 1.3917.

Moving Average Support Level

The 200-bar moving average remains a key support level. Watching this area is essential as both buyers and sellers contest control, which can influence future price movements. USDCAD is testing a vital support zone around 1.3810, which has turned into a battleground. This decline is driven by today’s strong Canadian manufacturing data and disappointing numbers from the US. Recent trends show Canadian data holding up well, while US figures are weakening. Sellers are focusing on Canada’s strong August jobs report, which added 45,000 jobs and kept the unemployment rate steady at 5.7%. As a result, the Bank of Canada is keeping a hawkish tone, suggesting that interest rates may remain high. This environment supports a stronger Canadian dollar.

US Market Conditions

In the US, conditions are weaker, affecting the pair negatively. The latest Non-Farm Payrolls report showed only 155,000 new jobs, falling short of expectations. Additionally, inflation data revealed a slight drop to 3.4%. This suggests that the Federal Reserve may pause its interest rate hikes for now. This difference highlights the importance of the 200-period moving average at 1.3806 for traders. If the price breaks below this area, put option volume could increase as traders aim for the 1.3700 mark. On the other hand, a strong rebound could encourage bullish strategies, betting that this long-term support will hold. This 1.3800 level has acted as a solid floor multiple times, especially during the volatility seen in early 2024. A daily close below this support in the next few weeks could signal a strong bearish shift and change the medium-term trend. Additionally, the failure to break above the 1.3900 resistance last week suggests that upward momentum is fading. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now