USD/JPY found support near 155.35 on Wednesday after pulling back from a two-week high set the day before. It traded around 155.75, almost unchanged on the day, after rising over the past week. After the Fed struck a hawkish tone, the US Dollar still saw fresh selling. Traders were worried about new trade-policy disruptions linked to US President Donald Trump. Geopolitical risks also lifted demand for safe-haven assets like the Japanese Yen, which added pressure on USD/JPY during the session.

Japan Policy Signals And Yen Dynamics

Reports said Japan’s Prime Minister Sanae Takaichi voiced concerns about further rate hikes in a meeting last week with BoJ Governor Kazuo Ueda. Japan also nominated two reflationists to the BoJ board. This lowered expectations for faster rate increases and helped limit JPY strength. Repeated rebounds from the 200-day EMA breakout area, followed by a move higher, suggest the technical tone is improving. The MACD is above its signal line and back in positive territory, while the RSI sits near 54. Resistance stands at 156.90, then 158.40, with 160.00 above that. Support is at 155.00, then 153.50, and 152.70 near the 200-day EMA. In late 2025, we highlighted a constructive setup, and the bullish USD/JPY case played out as expected. The pair broke above the 156.00 and 158.40 resistance levels we tracked and later peaked just above 160.00 in December 2025. After a healthy pullback, USD/JPY is now consolidating near 157.80, which may offer a fresh entry area.

Policy Divergence And Trade Volatility

The key driver remains the wide gap between central bank policies, which has grown even larger. US inflation for January 2026 came in at a firm 3.2%, keeping the Federal Reserve hawkish at its latest meeting. In contrast, Japan’s national CPI last month was only 2.1%, allowing the Bank of Japan to signal that any tightening will be very gradual. This gap in policy continues to limit meaningful Japanese Yen strength. In late 2025 data, Japan’s Tankan survey for large manufacturers showed weaker business sentiment, supporting the BoJ’s cautious stance. This softer backdrop for the yen can help support long USD/JPY positions. For derivatives traders, this setup favors strategies that benefit from a slow grind higher or limited downside. Consider buying call options with strikes around 159.00 and 160.00, with expirations in April or May 2026. This targets a possible retest of prior highs while capping risk to the premium paid. Still, US trade-policy headlines can spark sharp volatility, as we saw last year. Surprise tariff news could trigger a rush to safety and a quick, temporary drop in USD/JPY. To help manage this risk, a small position in out-of-the-money puts can work as a hedge against bullish exposure. Create your live VT Markets account and start trading now.

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USD/JPY found support near 155.35 on Wednesday after pulling back from a two-week high set the day before. It traded near 155.75, roughly flat on the day, and maintained the upward trend seen over the past week. The US dollar came under selling pressure despite a hawkish Federal Reserve outlook. Concern over US President Donald Trump’s trade policies, along with broader geopolitical risks, increased safe-haven demand for the yen. This added intraday pressure on USD/JPY.

Technical Outlook And Key Levels

Reports said Japan’s Prime Minister Sanae Takaichi voiced concerns about further rate hikes during a meeting last week with Bank of Japan Governor Kazuo Ueda. Japan also nominated two reflation-leaning members to the BoJ board. These developments reduced expectations for faster rate hikes, which limited yen strength. From a technical view, repeated rebounds from the 200-day EMA breakout area keep the bias bullish. The MACD has crossed above its signal line and moved back into positive territory. The RSI is near 54 and remains above its midpoint. Resistance is at 156.90, then 158.40. If 158.40 breaks, 160.00 is the next major level. Support is at 155.00, then 153.50, with 152.70 near the 200-day EMA. Looking back at our 2025 analysis, the bullish setup we highlighted played out well. USD/JPY broke above the key resistance at 158.40 and later moved through the major 160.00 level that year. This confirmed the underlying strength we saw building and rewarded traders positioned for further gains. The main drivers of yen weakness have largely stayed in place. As expected, the Bank of Japan has remained cautious. Recent data supports that stance: Japan’s core CPI for January 2026 came in at 1.9%, still slightly below the 2% target. This ongoing shortfall continues to push back expectations of a more hawkish shift from the BoJ.

Strategy And Risk Framework

On the other side, the US dollar is facing headwinds, similar to what began to appear in 2025. US weekly jobless claims rose to 235,000 this month, the highest level in several quarters. This points to a modest cooling in the labor market. As a result, the pair may not rally in a straight line, and dips could offer opportunities. With the uptrend still in place but the dollar softer, traders may consider buying call options to target further gains while limiting downside risk. With spot trading around 161.50, one approach is to buy out-of-the-money calls—for example, a 163.00 strike expiring in the next few weeks. This offers defined risk while keeping long exposure, and it reduces the impact of a sharp, unexpected pullback. The 160.00 level, which was our main upside target in 2025, is now an important support zone. Treat this area as a key line in the sand. A sustained break below 160.00 would weaken the near-term bullish view and suggest a deeper correction is developing. Create your live VT Markets account and start trading now.

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France’s consumer confidence index rose to 91 in February. This was slightly above the forecast of 90. The February result beat expectations by 1 point. It suggests consumer sentiment was a bit stronger than predicted.

Consumer Confidence Slightly Beats Forecast

France’s consumer confidence reading for February was 91, just above the expected 90. This small upside surprise suggests households may be a little more resilient than markets assumed. That could support short-term opportunities in French consumer discretionary names, including luxury and automotive stocks. One approach is to look at short-dated call options in those areas. However, it’s important to keep the context in mind. A reading of 91 is still well below the long-term average of 100. In 2025, this indicator struggled to rise much, showing that cost-of-living worries have not gone away. Because of that, it may be safer to focus on income strategies—such as selling out-of-the-money puts on the CAC 40 to collect premium—rather than positioning for a big rally. The European Central Bank will likely notice the firmer tone in consumer sentiment, especially with January Eurozone inflation still around 2.6%, above the ECB’s target. A more confident consumer can help sustain demand and keep price pressures in place, which could reduce the need for near-term rate cuts. This makes positions that benefit from stable rates over the next quarter—such as certain interest-rate futures strategies—more appealing. Since the data was only a modest surprise, implied volatility may drift slightly lower.

Implied Volatility Likely To Ease

Markets have largely absorbed the news, pointing to a calmer period rather than a clear new trend. If volatility continues to soften, selling volatility—such as through options linked to the VSTOXX index—could be attractive over the next few weeks. Create your live VT Markets account and start trading now.

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EUR/USD rose 0.27% to near 1.1800 in European trading on Wednesday as the US Dollar weakened after President Donald Trump’s State of the Union address. The US Dollar Index (DXY) slipped 0.2% to around 97.65. In his speech, Trump highlighted his economic record and criticised a Supreme Court ruling against his tariff policy, calling it “unfortunate”. He said tariffs had helped drive an “economic turnaround”.

Shift In Market Drivers

Markets are also focused on the Federal Reserve. The Fed is not expected to cut interest rates at its March and April meetings. In Europe, attention is turning to Germany’s flash Harmonised Index of Consumer Prices (HICP) for February, due on Friday. Germany’s HICP is forecast to rise 0.5% month-on-month, after a 0.1% fall in January. The annual rate is seen at 2.1%. Destatis publishes the HICP each month, and it is harmonised across the EU to allow comparisons. From a technical view, EUR/USD traded near 1.1805. The 14-day RSI sat in the 40.00–60.00 range, and price was near the 20-day EMA at 1.1800. A daily close above 1.1835 could open a move toward 1.1900. A drop below 1.1742 could point to 1.1670. The date today is 2026-02-25T11:11:04.818Z. A year ago, EUR/USD was trying to break out of a descending triangle near 1.1800, driven by political headlines. Today, the pair is much lower, around 1.0850. The focus has shifted to differences in central bank policy. Because the main drivers have changed, last year’s trading approach no longer fits the market.

Options And Technical Outlook

In February 2025, the view was that the Fed was unlikely to cut rates, which supported the dollar. Now in 2026, the latest US CPI shows inflation is still sticky at 3.1%. The Fed has stayed hawkish, and the dollar has strengthened sharply over the past 12 months. Markets are now more firmly priced for “higher for longer” than they were last year. At the same time, the euro has weakened from the optimism linked to Germany’s inflation outlook in 2025. Recent Eurostat data shows Eurozone headline inflation has eased to 2.5%, while growth has stalled near zero. This increases pressure on the European Central Bank to cut rates sooner than the Fed, which is a major headwind for the euro. For traders, this points to more downside risk in EUR/USD. One way to express this view is to buy put options with a strike around 1.0700 and an expiry over the next 60 days. This keeps risk defined while giving exposure to a potential break below recent lows. Implied volatility has been relatively low, which may create opportunity. Sharp moves are possible around the March and April central bank meetings. If you expect a large swing but are unsure of direction, a long straddle could benefit from a big move either way, especially if policy surprises the market. The technical picture also supports the bearish shift. The 1.1835 resistance level from last year is no longer relevant. The key resistance level now is the psychological 1.1000 area. Critical support sits near the yearly low around 1.0720. Any rallies toward 1.0950 may be better viewed as chances to start or add to short positions. Create your live VT Markets account and start trading now.

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EUR/USD is getting modest support. This is mostly due to expected US dollar weakness, not euro strength. The euro does not look clearly undervalued. The European Central Bank is also staying cautious, even as Germany adopts a more expansionary fiscal stance. The Federal Reserve sounds firmer than markets expect. A later start and smaller scale US rate-cut cycle could cap further gains in EUR/USD.

Central Bank Divergence Limits Upside

The euro has benefitted as the main alternative to the US dollar when the dollar’s risk premium rose, driven by erratic US policymaking. This briefly pushed EUR/USD above 1.20 in January. Even so, the upside seems more limited than for currencies like JPY or CNY, where undervaluation is easier to argue. Germany’s fiscal approach should help keep Eurozone growth steadier through 2026. We expect upside in EUR/USD to stay constrained in the coming weeks because central bank paths are diverging. The Federal Reserve is signaling it will ease policy more patiently than markets anticipate. This mix should limit large gains in the pair. Recent US data supports this firmer Fed stance. January 2026 core PCE inflation held at 2.9%, and the latest jobs report showed a resilient labor market. These readings lower the pressure for the Fed to deliver deep cuts, which helps the dollar’s relative appeal.

Potential Approaches For Derivative Traders

By contrast, Eurozone inflation is still cooling. The latest Harmonised Index of Consumer Prices (HICP) eased to 2.1%. That gives the ECB more room to consider easing sooner than the Fed. A cautious tone from ECB officials also supports the view that the euro lacks strong, independent drivers for sustained appreciation. We remember how erratic US policymaking briefly lifted the pair above 1.20 in January 2025, as the dollar risk premium rose. But that was an unusual setup. Today, the euro still lacks a strong undervaluation case to repeat that kind of move. Germany’s steadier fiscal policy may provide a floor, but it is unlikely to drive a major rally on its own. For derivative traders, this backdrop may favor selling out-of-the-money EUR/USD call options into rallies to collect premium. Bearish setups, such as buying puts or using put spreads, may also be considered to hedge or seek gains if the pair falls. Overall, conditions look less supportive for strategies that depend on a strong, sustained uptrend. Create your live VT Markets account and start trading now.

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Silver (XAG/USD) traded near $90.50 per troy ounce in early European trading on Wednesday. It rebounded after losses in the previous session. The 14-day RSI was near 56, which is above the midpoint and still below overbought levels. Price stayed above the nine-day and 50-day EMAs, which suggests a recovery after the sharp sell-off. The nine-day EMA was trending higher, while the 50-day EMA was mostly flat.

Technical Levels And Momentum

Resistance was seen near the psychological $100.00 level. Another key level is the record high of $121.66, set on 29 January. Support includes the nine-day EMA near $84.43 and the 50-day EMA at $79.94. A drop below both could open the door to the two-month low of $64.08, recorded on 6 February. Silver is a precious metal that can be bought physically or through products such as ETFs that track its price. Prices can move due to geopolitical risk, recession concerns, interest rates, the US Dollar, investor demand, mining supply, and recycling. Industrial demand also matters. Uses in electronics and solar can lift demand, along with economic conditions in the US, China, and India. Silver often follows Gold, and the Gold/Silver ratio is used to compare their relative value.

Strategy And Risk Management

Silver holding around $90.50 supports a cautiously bullish view. With price staying above key moving averages, the easier path may be higher, toward the $100.00 level. Traders may look at bullish strategies that fit this momentum, such as call options with strikes closer to $100.00. This technical strength also lines up with recent fundamental changes. Minutes from the Federal Reserve’s early February 2026 meeting pointed to a more dovish stance. That has helped push the US Dollar Index below 102. A weaker dollar and the chance of lower rates have historically supported silver. Industrial demand also appears strong. Global data for Q4 2025 showed solar panel installations rose 15% year over year. Solar is a major user of silver. This demand is expected to remain firm through 2026, taking up a large share of mining supply. Relative value has also shifted since last year. The Gold/Silver ratio sat near 85:1 for much of 2025, but it has tightened to about 75:1. This change reflects silver’s recent strength versus gold and suggests momentum is currently favoring silver. Even with these positives, risk management remains essential. A break below the first support at the nine-day EMA near $84.43 would be an early sign the trend is weakening. Derivative traders could use this level to take profits on bullish trades or add protective puts. A stronger bearish signal would be a close below the 50-day EMA near $79.94. That would weaken the recovery setup and bring the February 6 low of $64.08 back into view. In that case, a more defensive approach—such as bearish positioning or short hedges—may be appropriate. Create your live VT Markets account and start trading now.

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Germany’s gross domestic product (GDP) rose 0.4% year on year in the fourth quarter, in line with forecasts. This shows the economy grew compared with the same quarter a year earlier. The reading matched expectations at 0.4%, with no gap between the actual number and the forecast. This update applies to the year-on-year measure for Q4.

Market Reaction And Options Implications

Germany’s fourth-quarter GDP for 2025 came in exactly as expected, confirming the 0.4% annual growth already priced in. Because the data held no surprises, implied volatility in DAX index options may ease in the days ahead. That would make selling premium—through strategies like covered calls or cash-secured puts—more appealing than buying options. This result supports the 2025 theme of slow growth, not a strong recovery. The DAX has traded in a tight range since the start of the year, and this release provides no clear trigger for a breakout. As a result, range-based approaches—such as iron condors on the index—could work well over the next few weeks. Early 2026 data also points to a cautious outlook. February’s IFO Business Climate survey edged up to 86.1, but it remains low and does not yet suggest a clear shift in confidence. Markets still seem to be searching for direction, but they are constrained by this slow-growth backdrop. The European Central Bank is also under pressure. January’s final Eurozone inflation print was 2.6%, still above the ECB’s target. Weak growth in Germany, the region’s largest economy, makes it harder for the ECB to stay hawkish on rates. Upcoming ECB comments will matter, especially if the tone turns more dovish, since that could be the next key catalyst.

Euro Outlook And Positioning

For now, the euro may stay under pressure versus the dollar due to the growth gap. In EUR/USD options, traders could consider put-buying strategies or bear call spreads to position for potential downside. Soft German data offers little support for sustained strength in the single currency. Create your live VT Markets account and start trading now.

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Germany’s gross domestic product rose 0.3% quarter-on-quarter in the fourth quarter, matching forecasts. This means the economy grew compared with the previous quarter. The update did not include any further details.

Market Impact Outlook

Germany’s fourth-quarter 2025 GDP growth came in exactly as expected at 0.3%, so we do not expect an immediate or sharp market reaction. The result points to slow, steady growth rather than a surprise rebound or a slide back toward recession. Much of this was likely already priced in, so traders’ attention should shift from this backward-looking release to what comes next. For DAX index options traders, this confirmation of modest growth may reduce near-term implied volatility. After the late-2025 rally—driven by hopes of avoiding a recession—this data supports a calmer outlook. Strategies that fit range-bound trading or a gradual move higher may be more suitable than positions aimed at a major breakout. This report also adds little pressure on the European Central Bank to change its interest-rate stance. We expect interest-rate futures to stay aligned with the view that the ECB will hold steady, especially with January inflation still firm at 2.8%. Any rate cuts are still priced as a mid-2026 possibility at the earliest, and only if inflation cools further. In FX markets, the euro is unlikely to get a clear direction from this release alone. EUR/USD will likely respond more to upcoming U.S. data and changes in expectations for the Federal Reserve’s policy path. This GDP print mainly reinforces the idea of the Eurozone as a slow-growth economy, offering little catalyst for a stronger currency.

Key Data To Watch

Focus now shifts to more forward-looking indicators, especially the next German IFO Business Climate survey and the February Eurozone inflation report. These are more likely to move markets in the coming weeks because they will shape expectations for the first quarter of 2026. GDP confirms what already happened; inflation data will set the tone for what comes next. Create your live VT Markets account and start trading now.

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Sweden’s Producer Price Index (PPI) fell 2% year on year in January. This compares with a 2.7% year-on-year drop in the previous reading. In January, producer prices fell less than expected. The year-on-year decline was -2%, rather than the deeper -2.7% seen before. This suggests the deflation seen at the factory gate is starting to ease. It is an important sign that producer inflation may be finding a floor.

Producer Deflation Shows Signs Of Fading

This softer deflation may make the Riksbank less willing to cut its policy rate, which is currently 3.75% after its early-February meeting. Because of this, Swedish interest rates may stay firm in the coming weeks. Short-term interest rate futures that price in large and fast cuts now look exposed to a rebound higher. A less dovish central bank often helps the currency. That means the Swedish Krona could strengthen. EUR/SEK, which has been trading in a range near 11.20, could move lower if rate-cut expectations are scaled back. SEK call options could be a practical way to position for this move against the Euro. From the perspective of early 2026, markets still remember the sharp rate hikes of 2024, which were needed to bring down inflation after it climbed well above 9%. Because that episode is still fresh, investors may react quickly to any data that hints inflation is not fully gone. That could lead to a fast repricing of rate expectations based on this PPI report alone. For the OMXS30 index, the message is mixed and could raise volatility. Better pricing power can support earnings, but worries about “higher for longer” rates could pressure valuations.

Equity Volatility May Increase

Given the uncertainty, options strategies like straddles may be better suited to target a rise in volatility, rather than betting on a single direction. Create your live VT Markets account and start trading now.

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Sweden’s producer price index (month-on-month) rose to 2.4% in January. This was up from -1.1% in the previous period. This means producer prices moved from falling month to month to rising. The latest figure shows prices were higher than the month before.

Producer Prices Reverse Higher

Sweden’s producer prices jumped in January. The index rose 2.4% month-on-month, after a -1.1% drop in the prior month. This is a clear turnaround and suggests price pressures may be building again. It also challenges the view that inflation was fading, so markets may need to rethink the Riksbank’s next steps. After this data, the chance of a Riksbank rate cut in the first half of 2026 looks much lower. Officials may sound more hawkish, similar to early 2025 before the policy shift. Derivative markets that had priced in at least a 25 basis point cut by July may now move toward a “higher for longer” view on rates. For rates traders, this points to higher short-term rates. Paying fixed on Swedish interest rate swaps (IRS), especially in the 2-year tenor, could benefit if the market continues to price out rate cuts. Swedish bonds sold off sharply in late 2024 when inflation surprised on the upside; something similar could happen again. In FX, the Swedish Krona (SEK) may strengthen, especially versus the Euro. The European Central Bank is still pointing to a possible summer rate cut, which would widen the policy gap in Sweden’s favor. One way to express this is buying SEK call options against the EUR, looking for EUR/SEK to move back toward 11.15, where it traded in Q4 2025. Higher inflation is also a risk for Swedish equities. If borrowing costs stay higher, company margins can come under pressure. The OMXS30 rose almost 4% in January 2026 on hopes of easier policy, and that rally could now be at risk. Buying put options on the index can work as a hedge, or as a way to position for a near-term pullback.

Equity Risk And Hedging

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