Initial jobless claims in the US rose to 263,000 last week, exceeding the expected 235,000. This increase changed expectations for the Federal Reserve and drove US stock markets to new heights. The rise in claims was mainly due to Texas, where claims jumped from 16,604 to 31,908, accounting for over half of the unexpected increase. This sharp rise in Texas is likely a temporary situation, marking the highest level since the pandemic.

Considering Seasonal Adjustments

When adjusting for seasonal changes, the fluctuations are even clearer. Jobless claims might drop next week, but this data will come out after the FOMC decision. The market reacted strongly to the rise in jobless claims to 263K. The S&P 500 set a new record while interest rate markets adjusted their views on a more lenient Federal Reserve. This reaction stemmed from the assumption of a weakening job market. However, we believe this assumption is not entirely accurate. Over half of the rise was due to that single surge in Texas. That state’s claims hit the highest level since early 2020, likely caused by one-off layoffs rather than a widespread economic slowdown. If we exclude this outlier, the national trend is closer to the steady 220-240K range we have seen for most of 2025. As a result, implied volatility has decreased, with the VIX index dropping below 14. This makes options more affordable, presenting an opportunity to protect against a market that might be misreading the data. We suggest buying puts on major indices or call options on the VIX, as this could provide useful protection in the weeks ahead.

The Federal Reserve’s Upcoming Decision

The Federal Reserve will view this increased claims number shortly before their decision next week. This might lead them to issue a more cautious statement, even if they believe the data is not entirely reliable. The real opportunity may come after their meeting, as we expect next week’s claims data to drop significantly, prompting the market to quickly reconsider its dovish expectations. We have seen similar data distortions after regional events in the late 2010s, which led to temporary but sharp market corrections once the data stabilized. A good strategy might be to position for a pullback when the market realizes the labor market isn’t as weak as this report suggests. It seems wise to scale back on initial strength as we await clearer data. Create your live VT Markets account and start trading now.

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Tesla shares have increased by $15.52, or 4.46%, reaching $363.30. They are nearing an important target zone defined by the highs of $367.34 on February 19 and $367.71 on May 29. This area will be key for short-term movements. If Tesla breaks above $367.71, it could gain further momentum, creating a stronger upward trend. The next significant target is the 61.8% retracement from December’s peak of $488.54, which sits at $383.76. Moving past this level could spark a larger rally. However, if the stock struggles at the $367.34–$367.71 zone, it may confirm this as a resistance level and lead to a decline. Year-to-date, Tesla shares are down 10.22% after ending 2024 at $403.84. Still, they have bounced back 68.5% since hitting a low on April 7, showing a strong recovery. Support levels are at $356.25, with the 50% midpoint at $354.39 below that. If the stock breaks these lower levels, it could encourage more selling. Recently, there was a brief change in the rankings of the world’s richest people; Larry Ellison of Oracle briefly overtook Elon Musk but Musk later regained his title. Today, September 11, 2025, we are watching Tesla approach the critical resistance zone between $367.34 and $367.71. A clear break above this area might lead to a significant upward move. Traders looking to take advantage of this could consider buying October call options with a strike price around $370 or $375 to capture potential momentum. Positive sentiment is boosted by expectations for Q3 2025 delivery numbers. Recent reports indicate that production at the Berlin and Austin gigafactories has surpassed targets, with some analysts predicting deliveries could exceed the estimate of 650,000 vehicles. If these projections are correct, they could drive the stock past key resistance and toward the next target of $383.76. On the flip side, if the stock cannot break the $367.71 level in the upcoming days, it could indicate strong selling pressure. Such a pullback might present opportunities for bearish strategies, like buying put options with a strike price near $350. A break below the initial support at $356.25 would further validate this bearish outlook. Despite the strong rally of over 68% from the April lows, the stock is still down for the year. In 2024, similar rallies often faced pullbacks, and ongoing concerns about market inflation could make this rally vulnerable. This pattern suggests that failing at resistance could quickly lead to a decline. With these trigger points clearly defined, using spreads may be a smart way to manage risk. A bull call spread—buying a $370 call and selling a $385 call—could reduce the cost of a bullish position. Conversely, a bear put spread might be appropriate if the rally stalls to protect against a sudden downturn.

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The European Central Bank (ECB) is still discussing a possible rate cut, but they will likely wait until December to make a decision. October is too soon for a change.

The Euro’s Current Strength

Right now, there is an 18% chance that the ECB will cut rates in December. However, this could change if inflation remains low or if economic conditions worsen. Despite these discussions, the euro is strong. It has risen by 50 pips to 1.1744 today. The ECB has indicated that they will pause rate changes for now, making the December meeting crucial. The euro’s strength at 1.1744 shows that the market feels relieved that a rate cut isn’t expected this month. This creates a clear period of uncertainty for trading in the upcoming quarter. The important point is the market’s low expectation for a December rate cut—only 18%. This may be an underestimate, especially since recent data from S&P Global shows the Eurozone Composite PMI dropped to 48.5 in August 2025, indicating a slight contraction in business activity. This presents an opportunity in interest rate options that could benefit if the odds of a rate cut increase.

Derivative Strategies

Volatility in the Euro Stoxx 50, as shown by the VSTOXX index, is expected to stay low in the short term but should be considered for buying if prices dip ahead of late October. We saw this trend in late 2023 when the ECB paused its rate hikes, leading to increased volatility around later policy meetings. If economic data weakens, long volatility positions will become more valuable. Thus, our derivative strategies will have two parts. In the next few weeks, we can sell short-dated options on the EUR/USD pair to earn premiums while the central bank holds steady. For a longer-term approach, we should consider buying euro puts or Euribor call options that expire in December or January. These longer positions provide an economical way to bet that upcoming data will push the ECB to act. The final inflation rate for August 2025 was 1.9%, just below the ECB’s target. This gives policymakers solid grounds to cut rates if economic growth falters. This data makes a December rate cut more likely than the market currently thinks. Create your live VT Markets account and start trading now.

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The AUDUSD has bounced back from a significant price point identified the day before, reaching new highs for 2025. It exceeded the previous peak from July at 0.66247, rising to a high of 0.6635, a level not seen since November 2024. However, this momentum slowed, leading to a price drop. The pair fell to a low of 0.65894, testing the lower end of a swing area between 0.6588 and 0.6598. Buyers stepped in at this support level, halting the decline. Prices then recovered, gaining momentum and moving back above both the July high of 0.66247 and the previous day’s high of 0.6635.

Current Session Trends

At present, prices are near new session highs around 0.66505, favoring buyers once more. The July high of 0.66247 now serves as a support level. If prices stay above this level, we may see further increases. However, if prices drop below, there could be more downside risk. Looking ahead, resistance is seen at a rising trendline near 0.6676, followed by the swing high from November 7 at 0.6683. Breaking through these levels would strengthen the bullish outlook and suggest further gains. The AUDUSD is currently at its highest levels of 2025, giving buyers an advantage for now. This price action supports strategies like buying call options with short-expiry dates. It’s crucial to see if the price holds above the old July 2025 high of 0.66247. This upward trend is backed by recent fundamental data. Australia’s unemployment rate unexpectedly dropped to 3.8% in August 2025, boosting positive sentiment for the Reserve Bank of Australia. Meanwhile, lower US inflation figures are raising speculation that the Federal Reserve may slow its tightening approach.

Analyzing Recent Market Dynamics

Despite this positive momentum, we need to be cautious. A similar attempt to rise failed just yesterday before finding support. Reviewing the charts from late 2024 reveals a pattern where an early breakout quickly reversed, trapping hopeful traders. If the price decisively falls back below 0.66247, it could signal a buy opportunity for put options, targeting around 0.6590. The key battleground in the coming weeks is likely to be between the support at 0.66247 and the key resistance near 0.6683. With the recent volatility and failed breakouts, implied volatility may increase, making strategies like straddles appealing for those expecting a big move but unsure of the direction. A solid break above the November 2024 high of 0.6683 would confirm strong bullish control. Create your live VT Markets account and start trading now.

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A year ago, some believed Trump might win the election, thinking Kamala Harris was a weak candidate. While betting odds were tight, many felt Trump could lead a Republican sweep, particularly in the House, which seemed unlikely at that time. Many ‘Trump trades’ did not succeed. Jim Cramer’s pick, New Fortress Energy, had ups and downs with Trump’s improving odds but fell due to high debt, now down 86%. Cramer’s other choices included betting against Nike and Starbucks, which dropped by 2.81% and 8.94% respectively. In contrast, Albertsons rose by 5.65%, Amazon by 28.3%, Apple by 3.52%, and Johnson & Johnson by 8.42%. All these trades performed poorly compared to the S&P 500’s 15.9% gain.

The Defining Political Trade

Bill Ackman pointed out that investing in Fannie Mae and Freddie Mac was a successful Trump trade, as they might benefit from being taken out of conservatorship. Fannie Mae saw a jump from $2.65 to $14.40, representing a 12x return. Ackman’s investment paid off as the U.S. Commerce Secretary hinted at a possible initial public offering (IPO) for both companies, potentially the largest ever. Reflecting on the past, the 12x gain on Fannie Mae since last September was the standout political trade, but that chance has passed. Now that the stock is at $14.40, the focus has shifted from speculative gains to event-driven changes. We’ve noticed implied volatility in near-term options rise above 150%, similar to the meme-stock phenomenon of early 2020. The trade is no longer about the simple idea of a Trump administration freeing the GSEs; that is now what the market expects. In the coming weeks, the main concerns will be execution risk and timing, especially after Commerce Secretary Lutnick’s remarks about a fast-tracked IPO. Any delays or issues could lead to significant stock corrections, making unprotected long positions riskier than they have been in the past year.

Market Strategies

With very high implied volatility, buying options outright has become expensive. Instead, traders are turning to strategies that generate income, like selling covered calls on existing stock holdings or using credit spreads. Recent analysis shows that a 30-day, 20% out-of-the-money call option is bringing in over 8% of the underlying stock price, indicating the market’s prediction of big price movements. The main thing to watch for is a clear timeline or structure for the IPO mentioned by Lutnick. Looking back at the PayPal spinoff from eBay in 2015, specific details about dates and terms led to significant price shifts in the final months. Until there’s an official filing, we can expect the stock to react strongly to rumors, making defined-risk option strategies a safer choice. Create your live VT Markets account and start trading now.

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The USDCAD has dropped after testing the resistance zone between 1.38917 and 1.3904. Earlier in the session, the pair reached into this important area, which once again acted as a ceiling. The failure to break through resistance, combined with U.S. data on initial jobless claims and CPI, led to a downward movement. On the downside, the price is now approaching the swing area between 1.3812 and 1.3831. This area is supported by the rising 100-hour moving average, currently at 1.3859, which serves as a short-term pivot.

Potential Points Of Support

For those seeking points of support, the 1.3812–1.3831 region is worth watching. If the price bounces from this area, it might regain upward momentum, with resistance likely appearing at the 1.3890–1.3904 zone. If the price falls below the 100-hour moving average and the swing low at 1.3812, sellers could take control, suggesting a bearish trend and a possible further drop. Following the recent rejection at the 1.3904 resistance area, our focus is on the key pivot zone between 1.3812 and 1.3831. This action was influenced by the latest U.S. economic reports, which showed initial jobless claims steady and August’s Consumer Price Index rising slightly to 3.4% year-over-year. The market is now assessing whether this support level, backed by the 100-hour moving average, will hold. The overall economic picture shows a preference for the U.S. dollar, which strengthens this technical crossroad. Canada’s latest jobs report revealed an unexpected loss of 5,000 jobs, indicating some weakness in its economy. This contrasts with a resilient U.S. economy that suggests the Federal Reserve will maintain a hawkish stance based on the data.

Commodity Prices And Market Strategy

Additionally, commodity prices play a crucial role. WTI crude oil has fallen from recent highs above $88 to around $84 a barrel due to global demand concerns. This decline in oil, a key Canadian export, often weighs on the Canadian dollar, making the 1.3812 support level critical for determining the near-term direction. Traders expecting a bounce from this support are considering buying October 2025 call options with a strike price near 1.3850. This strategy aims to capture a potential rebound towards the 1.3900 resistance in the coming weeks. A successful hold of support would indicate that the broader uptrend remains valid. On the other hand, if the price breaks below the 1.3812 floor, it would signal a significant bearish shift in momentum. In this case, we plan to buy October 2025 put options with a strike near 1.3800, allowing us to benefit from a deeper correction as sellers dominate. The current tension between central bank policy expectations highlights the sharp market fluctuations seen in 2023 when differing policies drove currency trends. How the USDCAD behaves around this 1.3812 pivot point will likely influence the pair’s trajectory through the end of the month. Create your live VT Markets account and start trading now.

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The EUR/USD has increased, boosted by comments from ECB President Lagarde about a less dovish approach. A fall in U.S. yields, with the 10-year yield dropping below 4% for the first time since April 7, also helped this rise. Lagarde mentioned that the disinflation process has ended and trade uncertainty has decreased. From a technical perspective, the EUR/USD pair has regained the 100-hour moving average at 1.1722 after facing seller resistance. Momentum picked up due to Lagarde’s comments and falling yields, benefiting buyers. Right now, traders are focused on a resistance area between 1.1730 and 1.1742, which reached a peak of 1.17435.

Price Breakthrough

If the price breaks through this resistance, attention will turn to Tuesday’s high near 1.1779. Future targets include the peak of 1.1788 on July 24 and the July 1 high of 1.18292, the highest level since September 2021. Traders will watch to see if the pair stays above the 1.1730-1.1742 range for signs of a bullish trend. Last year, the market reacted strongly to Lagarde’s hawkish comments, which led to lower U.S. yields and pushed the EUR/USD higher. At that time, the pair broke through key moving averages and tested resistance around 1.1742. This change in central bank tone set the stage for the volatility we have encountered since. Today, the situation has changed as the policy gap between the ECB and the Federal Reserve becomes more apparent. Eurozone core inflation unexpectedly rose to 2.8% in the latest update, prompting the ECB to pause its rate-cutting cycle. In contrast, the U.S. is considering a rate cut before the end of the year, as recent GDP growth slowed to an annualized 1.4%.

Buying Call Options

Given this context, it may be wise to consider buying near-term EUR/USD call options to take advantage of potential gains. A strike price around 1.1800 could be a good strategy, targeting the highs seen in mid-2024. This provides a defined-risk opportunity to profit if the ECB keeps its cautious stance and the pair breaks through recent resistance. However, uncertainty surrounding upcoming central bank meetings means we should be ready for significant price movements in either direction. Implied volatility for EUR/USD options has already climbed to 8.5%, up from a low of 5.2% earlier this year. A long straddle—buying both a call and a put with the same strike price—would allow us to profit from a major price swing, no matter the direction. To prepare for a potential reversal, we need to consider downside risks. The latest U.S. non-farm payroll report revealed a surprising addition of 250,000 jobs, highlighting underlying strength that could delay Fed rate cuts. Purchasing protective put options with a strike around 1.1650 would help shield our portfolios from a sudden drop if Fed officials become hawkish again. Create your live VT Markets account and start trading now.

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US stocks have hit their highest levels ever. Non-tech companies helped lift the S&P 500 to a record high, showing that investors are looking beyond just tech stocks. The S&P 500 rose 37 points to reach an all-time high of 6572. Top-performing stocks included MU, ABBV, GS, CAT, MMM, MS, LOW, HD, WMT, and GM. Many of these may gain from anticipated rate cuts, especially after a disappointing jobless claims report raised expectations for aggressive rate cuts by the Federal Reserve.

Market Optimism Amid Economic Worries

On the other hand, NFLX dropped by 2% following the exit of its chief product officer, known for supporting reality TV shows. Deutsche Bank raised its year-end target for the S&P 500 to 7000, showing optimism for ongoing growth. The S&P 500 has just set a new record, and the market suggests that bad economic news may actually benefit stocks. Last week, jobless claims rose to 245,000, the highest in three months. Traders quickly priced in over a 70% chance of a Fed rate cut this month. This indicates a strong appetite for risk, making bearish call options or call spreads on the broader index appealing. We are seeing money moving from tech stocks to cyclical sectors like financials and industrials, which have outperformed tech recently. With the VIX at its yearly lows around 13.5, buying options is currently cheap. This is a great time to buy calls on sector ETFs like XLF (Financials) or XLI (Industrials) to benefit from this shift. Stocks like Caterpillar and Goldman Sachs are doing well because they are sensitive to interest rates and positive economic outlooks. Traders who believe in this trend might consider buying individual call options on these strong stocks for more targeted exposure than an index option. A similar pattern was seen in late 2023 when expectations of a Fed pivot sparked rallies in these companies.

Strategies for Easing Market Opportunities

However, company-specific news can still negatively impact individual stocks, as seen with Netflix after its executive departure. This weakness in an otherwise strong market provides a chance for bearish bets, like buying put options on NFLX. It also serves as a reminder to hedge long portfolios by purchasing some out-of-the-money index puts, especially since volatility is currently inexpensive. With forecasts from Wall Street, like Deutsche Bank’s target of 7000 for the S&P 500, upward momentum is expected to continue into year-end. This supports using longer-dated call options, such as those expiring in December 2025 or January 2026, to take advantage of this potential movement. This strategy allows traders to stay bullish while managing their risk. Create your live VT Markets account and start trading now.

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U.S. stock indices rose despite mixed economic news. Initial jobless claims came in at 263,000, higher than the expected 235,000. The Consumer Price Index (CPI) also went up, mainly due to rising housing costs. Rent increased by 0.34% this month, while shelter costs rose by 0.39%. However, real-time data suggests that housing prices might stabilize, which could affect future rent and shelter inflation.

Federal Reserve Interest Rate Decisions

The market anticipates that the Federal Reserve will cut interest rates, driven by economic trends and developments in AI. U.S. Treasury yields fell, with the 10-year yield dipping below 4.00% for the first time since April. The S&P and NASDAQ closed at all-time highs, and any positive close today could further extend these records. The current market standings are: The Dow rose by 201 points to 45,691, the S&P climbed by 16.21 points to 6,547.6, and the NASDAQ increased by 32 points to 192.93. Notable gainers included Micron, up by 10.79%, while Oracle and Broadcom saw declines of 2.97% and 1.31%, respectively. Other winners were Synopsys and Stellantis, while AMD and Delta Air Lines faced minor drops. With the market focused on an expected Federal Reserve rate cut next week, it’s wise to consider positioning for a further rise in major indices. The recent increase in initial jobless claims to 263,000 gives the Fed more reason to relax its policies, even with persistent shelter inflation. The VIX, which measures expected market volatility, is currently calm at around 16, making it a good time to buy call options on the S&P 500 or Nasdaq 100 to benefit from this optimistic outlook.

Implications of Treasury Yield Movements

The decline in the 10-year Treasury yield below 4.00% is an important sign, making equities more appealing compared to bonds. We saw a similar trend in late 2023, where expectations of rate cuts led to a strong rally in both stocks and bonds, as borrowing costs were projected to drop. This historical context implies that options on interest-rate-sensitive instruments like Treasury bond futures could also serve as a valuable hedge or speculative position. In the tech sector, there isn’t a retreat from the AI theme; rather, there’s a rotation among key players. While big performers like Oracle faced some profit-taking yesterday, semiconductor companies like Micron and Lam Research gained significantly, indicating capital movement within the sector. August data showed a 5% month-over-month rise in memory chip prices, greatly benefiting firms like Micron. This internal market shift opens up chances for more sophisticated trading strategies beyond just buying index calls. A pairs trading approach—purchasing calls on strong semiconductor stocks while buying puts on weaker ones—could take advantage of the differences in their performance. Additionally, selling covered calls on stocks like AMD or Broadcom can create income while the market digests their recent gains. Create your live VT Markets account and start trading now.

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The chance of the European Central Bank (ECB) making another rate cut next year has dropped to just below 50%. This change comes after President Lagarde’s positive speech. Before the press conference, market expectations for mid-2026 were around 60%. However, views changed after the conference, leading to lower expectations. Now, many believe the most likely time for an additional cut is during the July 2026 meeting, with an expected easing of 12.2 basis points. For the rest of this year, the chance of a rate cut has fallen from 40% to 24% after the ECB’s decision. Meanwhile, the euro rose about 45 pips from its level before the ECB announcement. After an initial drop, the euro gained strength as Lagarde changed her outlook on growth risks from negative to neutral.

Big Changes in Interest Rate Expectations

We are seeing major changes in interest rate expectations following the ECB’s recent statements. The likelihood of a rate cut before the end of this year has dropped from 40% to just 24%. This suggests that the ECB may be willing to keep rates steady for longer than we expected. This change is backed by recent data showing a stronger Eurozone economy. August’s inflation rate was slightly higher at 2.4%, and early September flash PMIs suggested the services sector is growing at its fastest pace in over a year. A central bank concerned about growth wouldn’t be seeing these positive figures. For currency traders, this stronger data supports the euro, which rose by 45 pips today. With the Eurozone unemployment rate recently hitting a low of 6.3%, the economic environment favors a stronger currency. Options traders might think about selling out-of-the-money puts on the euro, as the risk of a sharp decline seems to have decreased.

Interest Rate Market Vulnerability

In the interest rate markets, bets on quick and steep cuts now look vulnerable. We remember the strict tightening cycle from 2022 to 2023, and it seems the ECB is not in a hurry to reverse those actions after the earlier cuts this year. Short-term interest rate futures may face selling pressure as the timeline for the next cut extends towards mid-2026. Create your live VT Markets account and start trading now.

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