Trump announced on Truth Social that a deal with China is complete and just needs final approval from himself and President Xi. The agreement allows China to supply full magnets and essential rare earth elements, while the US will accept more Chinese students in its colleges and universities. According to the deal, the US will impose a total tariff of 55%, while China’s will be only 10%. Trump’s announcement doesn’t provide details about other parts of the agreement, leaving some terms unclear.

Market Reaction

Following the announcement, financial markets have shown some volatility, but overall remain stable compared to before. The cautious market response may stem from uncertainty around the specifics, especially since the US has recently lowered its tariff rate to 30%. We might hear more details from Chinese officials or other sources as the situation develops. Trump’s announcement, shared via social media, suggested changes to the exchange of key materials and students between two major economies. A significant point is the uneven tariff structure— the US set a duty of 55%, while China would only impose 10%. This 45-point difference is substantial, especially given that the US had just cut its tariff rate to 30%. This shift brings new challenges for importers and adds uncertainty for those involved in US-China trade. The markets showed initial uncertainty but stabilized, indicating caution rather than confidence. The lack of a strong directional bias means many are still analyzing the implications and waiting for clearer terms from Chinese officials before making adjustments. When announcements are more focused on diplomacy than specific legislation, it often leads to tighter liquidity in futures, particularly concerning equities and industrial commodities. That seems to be happening here.

Investment Strategy Considerations

These market conditions present good opportunities for gamma strategies, especially due to expected price fluctuations in response to policy changes. With limited short-term clarity, implied volatility remains flat or undervalued, making it attractive for long-vol exposure if combined with disciplined risk management. This type of agreement, focused on trade and educational exchanges, has implications across different assets. The link between rare earth imports and companies in the electronics and electric vehicle sectors is direct. After this announcement, options trading in semiconductor and battery technology companies surged, indicating positioning before clearer confirmations. Tariff differences are important not just for commodities but also for multinational businesses involved in East Asian supply chains. Companies should prepare for possible changes in input costs. Hedging through macro products with tight deltas—those that react quickly to trade comments—might be more effective than broad positions in indices. As bid-ask spreads tighten and risk assumptions shift, we have gradually reduced directional exposure and moved into strategies focused on convexity. There’s little advantage in guessing news flow throughout the day, but derivatives can help us express outcomes based on probabilities while keeping capital at lower risk. This approach makes even more sense when neutral deltas are difficult to read due to rapidly changing interpretations. With varying influences and unpredictable policies, staying flexible is wise. Discretionary signals, especially from Beijing regarding tariff terms, will likely influence short-term trading. It’s essential to let actual market movements confirm any convictions before making significant position changes. Consistency is more important than speed when responding to vague agreements. Create your live VT Markets account and start trading now.

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Mortgage applications in the US rose by 12.5% for the week ending June 6, 2025, after a decrease of 3.9% the previous week. This increase shows a strong recovery, with both new purchases and refinancing on the rise. The market index increased from 226.4 to 254.6. The purchase index climbed from 155.0 to 170.9, while the refinance index went up from 611.8 to 707.4. However, the average rate for a 30-year mortgage slightly increased to 6.93%, compared to 6.92% the week before. This jump in mortgage applications indicates strong demand and suggests that borrowers are reacting less sensitively to high borrowing costs than expected in tight financial times. The 12.5% increase is significant and goes beyond typical seasonal changes. The broad increase in both purchase and refinance applications signals that families and investors may be preparing for upcoming changes in policy or interest rates. Notably, refinancing activity has surged nearly 100 index points. This indicates that some borrowers are taking advantage of what they see as the best available rates, despite the small rise to 6.93%. Fleming’s data points to a shift in behavior, as those who delayed refinancing or home purchases—thinking rates would fall—are returning due to the belief that borrowing costs may stay stable. This shift isn’t just guesswork; it’s based on real transactions and changing expectations. For our trading desks, this information is not just directional; it reveals underlying trends. This surge shows that consumers can handle high rates if there are stable macroeconomic signals, such as inflation and liquidity. It suggests that long-term fixed-rate inflation hedges are still valuable even with rates stabilizing. Derivatives linked to mortgage-backed securities may need adjustments, particularly for short-term products. Strategies related to convexity hedging should reconsider their focus due to this new borrower tolerance. The refinancing behavior may also lead to varying prepayment risk profiles, impacting medium-duration models. Additionally, Patel’s index shift encourages financial strategists to weigh whether the short-term yield volatility supports current premium spreads or poses risks that warrant reevaluation. While one week’s data does not usually lead to drastic changes, the rapid and varied increase demands attention for instruments related to mortgage cycles. Overall, derivative desks should expand their scenario analyses to consider a slower rate decrease while incorporating the potential for sustained borrower interest, despite sticky yields. This data offers valuable insight into consumer behavior, rather than just surface-level changes, and for those managing exposure, that’s often where pricing inconsistencies arise most.

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A Federal Appeals Court has decided that the United States can keep using tariffs to protect itself from other countries. This ruling is seen as a win for the U.S., allowing these tariffs to stay in place for now. The decision extends former President Trump’s tariffs until July 31. The deadline for a trade deal is approaching quickly, with just 29 days left. This situation creates a sense of urgency and anticipation.

Tariffs and National Security

This ruling confirms that tariffs imposed under the administration’s interpretation of trade law can continue, especially those related to national security. The appellate court’s decision supports the president’s power to use these tariffs without immediate interference from Congress or the courts, at least under current laws. This means tariffs on certain imports—like steel, aluminum, and some manufactured goods—will likely remain unchanged until late July. With less than a month left, both the tariff extension and the upcoming trade negotiation deadline are approaching fast. From our perspective, this decision adds uncertainty to short-term price expectations and hedging strategies. Contracts for the next three to four weeks may see more price changes than usual, especially if there are more official comments or if expectations for a new trade agreement become clearer. With the trade deadline looming, additional price pressures are expected. This environment raises risks around calendar spreads and pushes implied volatility toward the higher end of normal seasonal ranges. Historical patterns suggest there may be more activity in out-of-the-money options, especially among industries sensitive to input costs. For positioning, calendar call spreads in certain industrials and soft commodity sectors may deserve attention, particularly given how well they performed during previous high-tariff periods. Current trends favor longer-dated buyers, as we see growing interest across selected strikes for mid-August and September expirations. This could signal preparations for significant price movements as trade news develops.

Monitoring Market Movements

The current mix of sentiment, regulatory delays, and high expectations brings specific opportunities. Buying at-the-money gamma may seem costly, but potential shifts from policy changes or hurried deadlines could make it worthwhile. We are actively tracking how volatility correlates among different assets, especially metals and agriculture, as recent macro hedging themes increasingly connect with these factors. We interpret this court decision as a signal for multiple financial instruments. Delta-adjusted positioning in some derivatives suggests a tactical bullishness, balanced by protective measures through more frequent short-term tail risk purchases. This mirrors past periods when tariffs created deadline-related uncertainty. For those managing relative value portfolios, we note a consistent difference between sectors directly impacted and those slightly affected by tariff actions. There might be trades offering better risk-reward ratios in the coming days, whether policy progresses quickly or not at all. Every new statement from trade officials and legal representatives carries the risk of repricing. This also means automated strategies may recognize false breakouts. When designing signals, it’s essential to adjust pattern recognition for macro-level headlines. Those using standard breakout triggers or basic momentum strategies should definitely reassess their filters. We have done this, and the number of false signals is significantly increasing. Currently, leverage is still low compared to quarterly peaks, but volume has been rising since the announcement. This could present opportunities for gamma scalping, particularly in sectors affected by events. However, maintaining discipline in position sizing is crucial. Short periods of inactivity may be brief but intense. It’s vital to keep risk management tight, especially given the ongoing legal uncertainties. Create your live VT Markets account and start trading now.

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President Trump expressed doubts about a deal with Iran during an interview on the New York Post Podcast, which led to a rise in crude oil prices. Delayed reporting allowed early listeners to take advantage of this market shift. This illustrates the importance of timely information for making market decisions. If the current trend continues, experts believe that losses from April could be recovered in the coming months. Quick and accurate information is crucial for understanding changes in the market. Trump’s comments about an unlikely resolution with Tehran had an immediate impact on oil futures, with prices increasing soon after the podcast was released. Typically, crude prices respond quickly to news affecting geopolitical risks in major production areas. Traders reacted by increasing long positions, expecting ongoing concerns about limited supply. The quick price rally following the interview—rather than delayed news coverage—highlights the advantage of real-time information. Investors who accessed the audio before it hit news terminals witnessed a significant market movement, emphasizing the value of immediate updates. Though April losses impacted market sentiment, the rebound since early May has boosted confidence, especially among those betting on sustained growth. Some oil-related contracts that had lagged earlier in the quarter have regained lost ground. As we monitor crude trends, it’s clear that comments from policymakers—even informal ones—can lead to shifts in market positioning. This situation shows that markets react more to perceptions of stability and policy direction than to just fundamental data. These perceptions influence pricing much faster than traditional reports. An important trend is the increasing dependence on secondary media for trading insights. In this case, the impactful comment came from a podcast rather than a formal statement. The immediate and lasting effect on asset prices suggests that there’s no longer a strict order for where significant news emerges. This means we should pay more attention to lesser-known sources, not just popular feeds. From a trading perspective, options markets have adapted. The implied volatility for short-term oil contracts has increased, indicating expectations of ongoing fluctuations. Trading desks are adjusting their delta exposure, especially after premiums widened. This is significant for those involved in gamma scalping or evaluating whether trading is driven by hedging fears or directional confidence. Currently, there’s rising interest in short-term contracts as traders prepare for upcoming headlines. We’ve observed increased activity in call spreads related to the next monthly expiry, with open interest growing in contracts looking for price increases in the $80–$85 range. This suggests belief that further gains have not yet been fully accounted for. While larger economic indicators like inflation and rates dominate stock discussions, commodity-linked assets remain sensitive to foreign policy and supply changes. These reactions matter. Participants are making serious trades based on these developments, impacting longer-term market structures and cross-commodity price movements. As we update our models to reflect these trends more accurately, the recent price spike should prompt revisions in our assumptions regarding correlations. This is particularly relevant as WTI and Brent prices diverged recently—indicating not just rising prices but also changes in relative value. This divergence affects spread trades, especially those betting on mean reversion among key benchmarks. It’s wise to reassess model inputs for these strategies to account for new realized volatility levels, which have flattened intraday but remain wide throughout the week. Recently, changes in positioning have also slightly influenced short-term interest rate curves, as concerns over energy-driven inflation resurfaced. This may exert temporary pressure on short-term instruments. Therefore, participants in leveraged futures or swaps linked to energy should carefully consider their implied volatility assumptions. Given the recent rapid moves, stop-loss levels are likely being adjusted more tightly. Ultimately, this shows that opportunities arise where information meets price discrepancies. Acting ahead of others hinges not just on the data itself but on recognizing its significance relative to market expectations.

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Japan’s Prime Minister Ishiba has shared updates on tariff discussions with the United States. While talks are ongoing, Japan is determined to protect its auto industry and agriculture from negative impacts. Akazawa has made several trips to Washington, but Japan’s commitment to safeguarding these industries is still strong. With only 29 days until a critical deadline, the outcomes of these discussions are highly anticipated. In the previous update, we highlighted Japan’s strong stance in trade talks, especially regarding tariffs. Ishiba noted that some progress has been made, yet key sectors like automobiles and agriculture remain off the table for compromise. Akazawa’s frequent travels to Washington highlight how important it is for Japan to secure favorable terms quickly. From a trading perspective, time is of the essence—less than a month remains, and that could either speed up or slow down changes in various asset classes related to Japanese exports. We are closely monitoring implied volatility in yen-denominated futures, which has seen a slight uptick. This suggests that some traders are becoming cautious due to political uncertainty rather than economic fundamentals. Japan’s strong protection of its domestic industries is expected, but it may mean that any agreement reached by the deadline won’t significantly change Japan’s trading activities in the short term. However, any hint of a change in Washington’s tone could impact USD/JPY options and spreads in corporate bonds linked to the auto industry. Recently, we observed a slight widening in 3-month risk reversals. Short-term interest rate futures may not show much change, but we should keep an eye on hedging activity tied to export-heavy sectors. The upward trend in mid-tenor Japanese Government Bonds (JGBs) suggests traders might be reallocating risk, anticipating potential government actions or statements. Any unexpected remarks from the US in the final days could lead to quick adjustments in pricing. Akazawa’s frequent presence in Washington reflects not just negotiations but also creates a sense of urgency for institutional investors. We’ve noticed some repositioning in synthetic forwards and equity-linked derivatives, especially those related to transport and rural cooperative outputs. In the last 48 hours, open interest in select Nikkei options has slightly decreased, possibly because traders are taking profits ahead of potential news or unexpected shifts. Keep an eye on front-end gamma, as it could be vulnerable leading up to formal announcements. Given Japan’s firm stance on industrial protection and the tight timeline, any sudden changes in trading positions are likely to happen quickly. It’s advisable to keep delta risk minimal and adjust positions more often until there is a clearer direction.

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Understanding how forecasts are distributed is important for the market’s reaction when actual data differs from expectations. The forecast range can significantly influence the market, especially when actual numbers surprise traders. Even if forecasts fall within a range, clustering towards one end can still lead to surprises if results align with the opposite side. For instance, consensus forecasts predict CPI year-over-year (Y/Y) at 2.5% (49% probability), while CPI month-over-month (M/M) is expected at 0.2% (65% probability).

Core CPI Expectations

Most expect Core CPI Y/Y to be around 2.9% (67%), with Core CPI M/M at 0.3% (66%). There’s a notable bias towards softer monthly expectations. The market anticipates the Federal Reserve will lower rates by 44 basis points in 2025. However, if Core CPI exceeds expectations, it could lead to only one rate cut this year. On the other hand, if CPI numbers are lower, it might strengthen expectations for two cuts, possibly even a third. This shows that market pricing is often influenced more by how forecasts cluster around a number than by the exact figures analysts provide. It’s rarely just about the expected number; it’s more about the surprise factor if actual results differ from where predictions are concentrated. When nearly half of forecasters predict a 2.5% Y/Y headline CPI, it suggests a clear consensus. However, leaning towards a low-end 0.2% for the monthly figure can shift market sentiment more noticeably. These indicate soft expectations—in both number and tone. The market reacts more strongly when softer predictions are met with stronger inflation data.

Market Implications and Pricing

For Core CPI, a Y/Y expectation of 2.9% is widely accepted. More surprisingly, over 65% of forecasts for monthly CPI are set at 0.3%. This distribution indicates participants are preparing for stable but slightly high underlying inflation, making the market sensitive to unexpected changes. In the context of US rates, many believe about 44 basis points of rate cuts will happen next year. This implies expectations of two cuts, potentially three, if inflation remains low. However, if the next Core CPI report exceeds expectations, especially above 0.3% for the monthly rate, it could quickly shift prospects towards only one cut. Anything above 0.3%—or nearing 0.4%—would challenge the comfort levels of policymakers, making it clear that current pricing may be overly optimistic. As we navigate the next two weeks, we should pay attention to how hedging skews are changing. Options pricing, particularly for shorter-term instruments, should indicate whether there’s new demand for protections against unexpected outcomes. This shift could happen quickly if some trading desks begin adjusting their risk assessments around the notion that inflation isn’t over yet. It’s crucial to observe not just the mean predictions but also how outliers behave—their pricing, hedging locations, and points of pivot. In this environment, even minor data mismatches could lead to significant repositioning. This isn’t mere speculation; it’s a matter of market structure. Short-term volatility trends may provide clues about future movements. If we see increased activity at higher strike prices for rate volatility, it suggests investors are already adjusting to inflation expectations rather than waiting for confirmation. Powell and his team haven’t ruled out further actions—they’ve just kept the door slightly ajar. Whether they take action depends on the deviations from what’s expected, and that’s where we should focus our attention. Create your live VT Markets account and start trading now.

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The latest ECB wage tracker shows that wage growth from negotiations is decreasing. The forecast for 2025 is now 3.1%, down from 4.7% in 2024. In early 2025, negotiated wages fell to 4.6%, down from 5.4% at the end of 2024. This slowdown in wage growth matches the ECB’s policy strategy and supports their views on future inflation. The drop in agreed salaries indicates that wage pressures in the euro area are easing, especially alongside recent reductions in consumer prices. The slower wage growth is not happening in a vacuum; it’s a sign of weakened demand in sectors that previously drove wage increases. Manufacturing and construction, in particular, are putting less upward pressure on wages, contributing to this broader trend. The European Central Bank will likely see these lower figures as supporting their recent policy decisions. With falling headline inflation and negotiated wages, the argument for further rate increases weakens. However, an immediate and significant policy change isn’t expected either. Most data still suggest a gradual slowdown, not a sudden reversal. The key point for us is not just the headline numbers, but what they mean for expectations around future rates and volatility. Fewer surprises in wage inflation limit surprises in policy changes. This narrows the range for rate differentials and reduces the likelihood of sudden shifts in interest-sensitive products. It alters the risk-reward dynamics—short-dated interest rate futures and options now provide less opportunity for significant moves without new triggers. During her last press briefing, Lagarde highlighted this trend. She recognized the changes but linked continued easing to future data. For this reason, we should expect market confidence in July’s meeting to heavily depend on next month’s wage revisions and core inflation indicators. The easing of wage pressure is already reflected in swap curves, especially in the mid-range. Traders who previously expected a resurgence in wage inflation are now moving towards flatteners, especially in euro-based instruments. This shift is supported by the ECB’s quarterly surveys, which project subdued wage-setting behavior due to lower profit margins and weaker demand forecasts. The options market is reacting similarly. Mid-curve volatility is decreasing, while risk reversals for December options indicate fewer scenarios requiring significant rate hikes. This aligns with the expectation that monetary conditions could shift from restrictive to neutral, but not immediately. With slowed wage growth and softened inflation signals, the relationship between inflation swaps and bets on policy tightening is weakening. This opens tactical opportunities to reevaluate previous market assumptions that are now less likely. However, timing is crucial. The upcoming labor cost index release and composite PMIs must support the current pricing adjustments. Trading flows show that medium-dated receivers are still preferred, particularly in the 2-5 year range. There’s also renewed interest in layered structures that benefit from stable policy without full reversals. This suggests a cautious approach—adjusting positions for less volatility while staying alert for any signs of increased market activity. In summary, these wage figures are more than just economic indicators; they represent a clear shift reflected in yield curves, options premiums, and trading flows. This is where the focus should be in the coming weeks. Stay disciplined, pay attention to secondary data, and engage with the disinflation narrative wisely.

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The ECB expects to make more changes to keep inflation at 2%. Market trends suggest another possible rate cut may happen soon. Adjustments will depend on economic changes. There is a careful attitude toward consistently falling short of the target rate. It’s crucial to address any significant risks of moving away from the inflation goal.

Trade Tensions and Their Impact

Right now, trade tensions are thought to possibly lower inflation, but the final effects are still unclear. A rate cut in June aims to help inflation move closer to 2% by 2026. The ECB feels the main risk is falling short of the inflation target, with little worry about rising inflation. The European Central Bank clearly states they might lower rates more if inflation stays low. They’ve already started taking steps in this direction, and markets seem to be reacting accordingly. The message is that changes to policy will be careful and based on new data. By highlighting ongoing low inflation, Lagarde and her team are managing expectations for quick policy changes. Their main priority is to prevent prices from dropping too much over time, rather than stopping them from rising too fast. This recent rate cut is not just a one-time action; it’s part of a longer plan to keep consumer prices around 2% by the middle of the decade. They are ready to accept short-term ups and downs to achieve this goal.

Global Economic Influences

We also need to acknowledge that ongoing trade conflicts are decreasing global demand, which affects pricing power across various sectors. If this trend continues, it could lead to lower-than-expected inflation. The uncertainty is about how long and widespread this will be, but policymakers are preparing to respond. In this context, we should note the small differences between short-term euro rates and longer-term rates. These differences reflect futures traders adjusting to this cautious approach. If the market grows more confident that growth and inflation will remain slow after summer, the yield curve might flatten more. Any changes in pricing models should consider these broader economic trends. There’s currently a low chance of stronger inflation data reversing this trend, and market volatility has decreased. If core inflation surprises us positively soon, positions may need to change quickly. However, the trend towards low rates seems firmly established right now. It may be best to remain flexible and avoid big bets in either direction. The ECB’s viewpoint, supported by forecasts and a slack labor market, suggests we will see stable but low price changes through the end of the year. Policymakers like Lane remind us not to overlook the impact of medium-term wage trends, even if immediate pressures are mild. Positioning around macroeconomic risks should be strategic and economical, focusing on specific exposures. Calendar spreads going into Q3 may present opportunities if the disinflation outlook sharpens. We are closely monitoring forward swaps, especially potential shifts between June and September pricing, which could provide short-term trades with good results. The upcoming meeting will be watched more for how they discuss future actions than for what they decide now. We need to proactively calibrate our reactions. Traders should focus on shorter expirations for now and maintain exposure that captures potential profits without relying too heavily on reverting trends. Given the current signals, a gradual easing seems most likely, but surprises can come from the edges—such as energy prices, wages, or international tariffs. For now, we will keep our strategies flexible, stay informed, and use options markets to express our views wisely. Create your live VT Markets account and start trading now.

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Nasdaq futures are currently at $21,882, with a bullish entry zone identified between $21,850 and $21,860. If prices retrace to this zone, it could be a good opportunity for traders. Bearish Trade Plan The bearish trade plan indicates a potential shift in market sentiment if prices fall below $21,800. Key tools like Volume Profile and VWAP help traders understand important price levels and make informed decisions. For bullish trades, consider profit targets at $21,879, $21,893, $21,924, and $21,980. For bearish trades, targets are set at $21,792, $21,777, $21,751, and $21,723. Traders should take partial profits regularly and adjust stop-loss orders when they hit certain targets. The tradeCompass system advises limiting trades to one direction per session. For more trading insights and opportunities, check out investingLive.com. To receive real-time market updates, join the investingLive.com Stocks Telegram channel. Directional Guidance This analysis provides directional guidance but is not financial advice. Traders should evaluate their strategies and risk management before making trades. Currently, Nasdaq futures are forming a short-term structure with tighter price compression just below recent highs. The $21,882 price sits just outside the buy zone of $21,850 to $21,860. When price action revisits areas like this, it often indicates a change in momentum rather than weakness. Typically, this suggests a strategic pullback rather than a lack of interest. The suggested bullish targets from $21,879 to $21,980 are set up for gradual exits. These targets are logically placed near areas of past activity, indicating intention behind their establishment. Movements toward these levels, especially near $21,980, tend to come with reduced risk and lower volatility—conditions that benefit tighter executions. In the bearish scenario, $21,800 is a significant level where risk management starts. This isn’t arbitrary; it shows a breakdown into previous acceptance zones. Key levels often experience increased slippage when crossed with genuine participation. The targets down to $21,723 provide clear steps for managing short trades. Avoid chasing if a price drops quickly; instead, recognize the staged approach to limit risk gradually. Volume Profile and VWAP are valuable tools that give ongoing feedback rather than fixed points. By using these, we can assess how much agreement the market has on certain prices. Staying above the VWAP generally supports continuation strategies. Conversely, failing to hold above it often signals a shift in sentiment. It’s crucial to avoid overtrading—sticking to one direction per session is key. This helps manage sudden volatility. Trading less often leads to better outcomes, not because it limits opportunities, but it reduces compounded errors. If a long idea doesn’t materialize or maintain its position, let it go. It’s important to follow the market’s lead without forcing trades. Partial exits and adjusted stops are crucial mechanics that help protect gains and minimize losses when targets are met. Failing to adjust stops after hitting a target can turn a winning trade into a gamble. Always make the necessary adjustments to remove emotional decision-making. Lin’s framework has proven effective, favoring measured targets with feedback loops, which is why his strategies stay relevant across sessions. Well-structured setups are dynamic; if they don’t break significantly in either direction, it usually reflects a lower commitment from market participants. In the coming days, watch for reactions at key levels. If prices return to the buy zone and show higher volume, we’ll act accordingly. If they struggle below $21,800, we’ll consider shorter positions but with deliberate sizing between the predetermined targets. Always distinguish daily fluctuations from meaningful changes—act only when prices engage at key levels. Create your live VT Markets account and start trading now.

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The EUR/USD options expiry at the 1.1400 level may limit price movements. The 200-hour moving average, located at 1.1404, can also help prevent downward pressure. Additionally, minor support at 1.1380 could keep prices steady before the US CPI report or updates from the US-China meeting. For USD/JPY, the 145.00 level is a resistance point. The pair has struggled to break through this mark on the daily chart for the past two weeks. As a result, this level is likely to act as a strong barrier with traders awaiting US inflation data and trade news. The options expiry near 1.1400 in the euro-dollar pair, along with the nearby 200-hour moving average, suggests these factors may limit price movements for now. With some support around the 1.1380 mark, we don’t expect major shifts—at least until we receive clarity from the upcoming US inflation figures or any significant developments resulting from US-China talks. In the dollar-yen pair, the 145.00 level has been tested multiple times recently and has held firm. This indicates that market participants see it as a ceiling for now. The expiring options are likely adding more strength to this level, making it harder for prices to break above unless strong fundamental data changes the sentiment. With the US inflation report coming up, this could significantly impact market moves, especially if it causes investors to adjust their positions quickly. So, where do we stand? When options expiry coincides with major technical levels like a moving average, the market can often become stuck in a range temporarily. Traders have seen this before, where prices remain stable until a catalyst emerges. In this case, we’ll be watching consumer price data closely. If inflation figures are significantly higher or lower than expected, that might give the momentum needed to move past these levels. Price movements are likely to stay limited in both pairs until that data is released. Additionally, any unexpected comments or policy shifts from Washington or Beijing could change the dynamics. For now, it’s important to monitor the ranges, identify pressure points, and adjust trading strategies as needed.

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