EUR/USD ticked higher on Thursday, ending a two-day slide. It traded near 1.1883, up about 0.10%. The US Dollar Index was around 96.80, close to two-week lows, as markets waited for US CPI data due on Friday. US data showed Initial Jobless Claims fell to 227K from 232K, but came in above the 222K forecast. Continuing Claims rose to 1.862 million from 1.841 million. January Nonfarm Payrolls rose by 130K versus a 70K forecast, and the Unemployment Rate eased to 4.3% from 4.4%.

Fed Policy And Dollar Outlook

Markets were pricing roughly 50 basis points of Fed rate cuts in the second half of the year. Kansas City Fed President Jeffrey Schmid said inflation is near 3% and that policy should stay restrictive. In the Eurozone, attention turns to Q4 preliminary Employment Change (QoQ) and GDP data due on Friday. A Reuters poll dated February 9-12 found that 66 of 74 economists expect the ECB deposit rate to hold at 2.00% through 2026, with no change expected before 2027. The euro is used by 20 EU countries. In 2022, it made up 31% of global FX turnover, with average daily volume above $2.2 trillion. EUR/USD accounts for about 30% of all FX transactions. The picture on February 12, 2026 looks very different from market sentiment in 2025. The US Dollar is no longer weak. The Dollar Index (DXY) is trading firmly near 104.50, far above the 96.80 level seen last year. Much of this strength comes from a Federal Reserve that has kept interest rates steady.

Derivatives Positioning And Risk Factors

The 50 bps of easing that markets expected in 2025 did not happen. Inflation stayed stickier than forecast. January’s CPI report, released yesterday, showed core inflation holding at 2.8%. This keeps pressure on the Fed to remain restrictive. The Fed funds rate is currently 4.75% to 5.00%, which supports the dollar because it offers higher yield. The Eurozone story is different. Growth has been weak. Final Q4 2025 GDP confirmed only 0.1% quarterly growth. The European Central Bank has also been more cautious than the Fed, keeping its deposit rate at 3.25%. This policy gap is a key reason EUR/USD is under pressure. The pair now trades near 1.0550, well below the 1.1883 level discussed at the same time last year. For derivatives traders, this backdrop still supports strategies that position for euro weakness. One approach is to buy EUR/USD put options, especially with strikes below 1.0500, to target more downside from the rate gap. The latest US January Nonfarm Payrolls report, which showed 195,000 jobs added, also strengthens the case for a resilient US economy and a firm dollar. Given the policy split, another strategy is to sell out-of-the-money EUR/USD call options to earn premium, since a large rally may be hard to sustain without a clear shift from the Fed or the ECB. Traders should still watch for softer US labor data or a surprise rise in Eurozone inflation, as either could change the trend. For now, momentum continues to favor a weaker euro. Create your live VT Markets account and start trading now.

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US EIA data showed a natural gas storage change of -249 Bcf for the week ending 6 February. The market expected -256 Bcf. The draw was 7 Bcf smaller than forecast. This means less gas was pulled from storage than expected.

Storage Report Implications

The 249 Bcf storage draw was smaller than the market expected. This points to weaker demand in the first week of February and a looser supply-demand balance. That is usually bearish for prices. We expect immediate downward pressure on the March and April futures contracts. Inventory levels also support a bearish view. Total working gas in storage is now 2,341 Bcf, which is 235 Bcf above the five-year average for this time of year. This large buffer helps protect against supply disruptions and reduces the chance of a strong rally in the near term. U.S. dry gas production also remains strong, near a record 106 Bcf per day. At the same time, NOAA forecasts warmer-than-normal temperatures across the eastern half of the U.S. over the next 6–10 days. Warmer weather usually lowers heating demand, which can add to price pressure. Given this setup, strategies that benefit from flat or falling prices may be more suitable. With these conditions, traders may look to sell call options or use bear put spreads to take advantage of expected weakness. Still, it is important to watch LNG export demand. Feedgas flows to terminals are holding near 14 Bcf/d, which can support prices. A sudden geopolitical event that disrupts global LNG flows could also change the market quickly.

Risk And Positioning Considerations

Volatility can return fast. In winter 2025, a short but severe cold blast caused a sharp price spike and hurt many short positions. Because of this, holding some upside protection can make sense. Cheap, out-of-the-money call options can help hedge against a sudden late-February shift in weather, which remains a key risk. Create your live VT Markets account and start trading now.

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USD/JPY rose toward 153 after strong U.S. payrolls data reduced expectations for near-term Federal Reserve rate cuts. The Japanese yen also strengthened. Japanese officials remain focused on FX moves, even with the yen’s recent gains. Vice Finance Minister for International Affairs Atsushi Mimura said authorities are “not lowering our guard at all”. He said the government remains on high alert over foreign exchange movements.

Japan Maintains Intervention Watch

Mimura did not comment on speculation about possible exchange rate checks. He said Japan will keep monitoring markets with a strong sense of urgency and will stay in close contact with U.S. authorities and market participants. Jiji press reported that Japan asked the U.S. to conduct exchange rate checks in January. The article was produced using an artificial intelligence tool and reviewed by an editor. With USD/JPY now nearing 160, the watchfulness we saw from Japanese authorities throughout 2025 is even more important. Strong U.S. labor data from January 2026 is creating a setup similar to last year: a firmer dollar and a weaker yen. In the coming weeks, the risk of direct intervention should be seen as very high. Japan intervened strongly in 2022 when the pair was near 152, far below today’s levels. The warnings and the reported exchange-rate checks with the U.S. in 2025 also showed clear discomfort. This history suggests Japan’s tolerance has limits—and current levels may already be beyond them.

Positioning And Hedging Considerations

New domestic data adds pressure. Japan’s core inflation for January 2026 was 2.2%, still above the Bank of Japan’s target. This gap—higher inflation at home alongside a weak currency—likely increases official frustration. That makes sudden and forceful action to support the yen more likely. For derivatives, buying out-of-the-money USD/JPY puts is a straightforward way to hedge, or to speculate on a sharp drop. Implied volatility has risen, so these options cost more. But that higher cost reflects a real risk: USD/JPY could drop 5–10 yen overnight. In this environment, paying for protection can be justified. High volatility can also be a trading opportunity. Strategies that benefit from big moves, such as long straddles, may work well. Continued official warnings (“jawboning”) may keep volatility elevated, which can hurt anyone who is short volatility and not prepared for a sudden policy surprise. The popular carry trade of being long USD/JPY looks especially risky at these levels. A sudden intervention could wipe out months—or even a year—of interest-rate gains in one session. The risk-reward of holding unhedged carry positions should be reassessed, because the downside from official action now looks much larger than the yield advantage. Create your live VT Markets account and start trading now.

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US January non-farm payrolls rose by 130k versus a 65k consensus. The unemployment rate fell to 4.3% from 4.4%, and the underemployment rate also improved. Overall, the data point to a steadier US labour market. That stability may give the FOMC more flexibility to delay rate cuts, which could limit near-term downside for the US Dollar.

Steadier Labor Market Supports Fed Patience

Further US Dollar gains will likely require more positive economic surprises. At the same time, uncertainty around Fed leadership succession and broader US policy risks remains a drag. Improving global growth prospects and stronger performance in non-US equities continue to weigh on the US Dollar. This view is most relevant for commodity-linked currencies such as AUD and NZD, as well as higher-yielding emerging market currencies. The strong January 2026 jobs report, which added 155,000 jobs, supports the view that the US labour market is holding steady. This should allow the Federal Reserve to be patient on rate cuts, limiting the risk of a sharp fall in the US Dollar. With the economy stable, the dollar may keep trading in a familiar range for now. For derivative traders, this suggests implied volatility in major USD pairs may be priced too high, creating opportunities to sell options. Strategies such as selling strangles or iron condors on currency ETFs can help collect premium if price action stays range-bound. A similar setup appeared in Q3 2025, before markets received a clearer policy signal.

Positioning Around CPI And Global Growth

Even so, growing strength outside the US could still pressure the dollar. China’s manufacturing PMI recently surprised to the upside, rising to 51.2. With iron ore prices holding above $130 per tonne, this backdrop supports currencies such as the Australian dollar. Buying AUD/USD call options offers a defined-risk way to position for a potential breakout. The key event in the coming weeks is the US Consumer Price Index (CPI) report. A higher-than-expected inflation print would reinforce the Fed’s patient stance and could spark a short-term USD rally, making near-dated USD call spreads more attractive. A softer CPI result would likely weaken the dollar and support positions in commodity-linked currencies. Longer-term uncertainty—especially around Fed succession—continues to cap sustained dollar strength. This shows up in the options market, where six-month protection is notably more expensive than one-month protection. That pattern supports selling near-term volatility, while staying cautious about large, longer-term directional bets on the dollar. Create your live VT Markets account and start trading now.

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EUR/USD steadied after a small dip tied to US jobs data. It entered Thursday’s North American session slightly higher. Analysts said the price action looked more stable. Yield spreads kept recovering and moved back toward the multi-year highs seen in late December and early January. Correlations with spreads also improved, suggesting a return to more fundamental drivers. The broader technical trend has stayed bullish since February 2025. Recent gains paused above 1.19, around 1.1920. Resistance sits just above 1.19, with little additional resistance until 1.20. Near-term trading was expected to remain in a 1.1850 to 1.1950 range. The article noted it was produced with the help of an artificial intelligence tool and reviewed by an editor. The euro looks to be stabilising, and the overall technical picture remains bullish. The uptrend that began in February 2025 is still in place, which points to further strength against the US dollar. The next key target is the psychologically important 1.20 level. On the fundamental side, the move is supported by recovering yield spreads between German and US bonds. These spreads are moving back toward multi-year highs. For example, the German-US 10-year spread has narrowed to about -125 basis points, its tightest level since early 2025. This may signal that capital flows will increasingly favour the euro, as Eurozone inflation came in at 2.5% last month, adding pressure on the ECB. For derivatives traders, this view supports buying call options with a 1.20 strike that expire in the coming weeks, such as March or April 2026. This approach offers upside exposure if EUR/USD pushes above the current resistance area near 1.1920. The recent small pullback after last week’s strong US jobs report (220k) is being treated as a buying opportunity. Traders who are only moderately bullish could instead consider selling put options. Selling a March 2026 put with a strike near the 1.1850 support area could generate premium. This strategy benefits if EUR/USD stays above that level, which fits with the view that the broader trend remains strong. Over the past year, bullish sentiment has been building as the euro has climbed steadily since early 2025. The recent pause just above 1.19 may be temporary, as the market consolidates before another move higher. There is little meaningful technical resistance before 1.20, a level EUR/USD has not held consistently since late 2024.

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U.S. existing home sales fell 8.4% month over month in January, after rising 5.1% the month before. This sharp move to an 8.4% drop in January points to clear weakness in housing demand. The main driver is still high borrowing costs. Freddie Mac recently reported the average 30-year fixed mortgage rate near 6.8%. In our view, affordability is now stretched to the limit after a short-lived lift in sentiment in late 2025.

Housing Equities Downside Positioning

As a result, we are positioning for downside in housing-related equities in the coming weeks. We expect continued pressure on homebuilder ETFs such as ITB and on major home improvement retailers like Lowe’s (LOW). Buying put options on these names is a straightforward way to benefit if building and renovation activity weakens further. This soft housing report also raises the odds that the Federal Reserve turns more dovish. The effective Fed Funds Rate is still 4.75%, while core inflation remains sticky at 3.1% in January. This data could give the Fed more reason to start cutting rates sooner than markets expect. Because of that, we are considering long positions in U.S. Treasury futures and call options on bond ETFs like TLT. A similar pattern appeared in late 2022, when mortgage rates first moved above 7% and housing cooled quickly. That period was followed by broader market volatility. With that backdrop, we are also looking at VIX call options to hedge against rising uncertainty spilling into the wider economy.

Volatility Hedge Considerations

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US existing home sales missed forecasts in January. Markets expected 4.15 million sales, but the actual figure was 3.91 million. This is the month-on-month result for existing home sales. It shows that sales activity was weaker than expected.

Housing Market Under Pressure

January’s shortfall confirms that the housing market is still feeling the strain from high borrowing costs. The average 30-year fixed mortgage rate has moved back above 7.1%, and affordability remains a major hurdle for many buyers. We see this as a clear sign that demand is cooling more than expected. This slowdown also matters for the Federal Reserve. It suggests that the tight policy stance expected through 2025 is having the intended effect. In our view, this weak report increases the chance that the Fed could cut rates sooner than the market had been pricing in. Traders may now assign a higher probability to a mid-year shift, rather than sticking with the “higher for longer” view. In the weeks ahead, this data supports a bearish outlook for housing-related stocks. We are looking at put options on homebuilder ETFs such as XHB, and on home improvement retailers, since both are closely tied to housing demand. During the slowdowns in 2023 and 2024, these sectors tended to react quickly to negative housing updates. At the same time, a possible earlier Fed pivot makes falling-rate trades more appealing. This strengthens the case for call options on long-duration Treasury bond ETFs like TLT, which typically benefit when yields drop. Lower rates could also support rate-sensitive tech and growth stocks that have been held back by the high-rate environment.

Market Positioning Implications

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ICE Brent is close to $70/bbl. Prices are being supported by uncertainty over Iran and OPEC+ output cuts, even after a large rise in US crude stocks. Refinery margins also strengthened after reports that a Ukrainian drone hit Lukoil’s Volgograd refinery in Russia, which has 300k b/d of capacity. OPEC kept its demand growth forecasts unchanged for 2026 and 2027 at 1.38m b/d and 1.34m b/d. OPEC+ output fell by 439k b/d month on month in January to 42.45m b/d.

Kazakhstan Supply Recovery

Kazakhstan’s oil output is expected to recover through February after power problems at the Tengiz and Korolev fields were fixed. Repairs at the CPC terminal should also increase loadings. February CPC loadings are forecast at 1.15–1.25m b/d, up from 907k b/d in January. March loadings are expected at 1.55–1.65m b/d. Canadian crude discounts have widened. Indian demand is also shifting away from Russian barrels after the US–India trade deal. A key market driver will be how much India cuts purchases, and how much Russia can reroute to other buyers. We expect oil prices to find strong support, with ICE Brent now testing $70 per barrel. The market appears to be looking past bearish signals, including the 12.1 million barrel build in US crude inventories reported by the EIA for the week ending February 6. Geopolitical risks—ranging from Iran uncertainty to drone strikes on Russian refineries—are the main driver right now. This makes bullish option strategies, such as call spreads, more appealing.

Positioning And Risk Management

Looking ahead, OPEC remains confident in demand growth this year, which helps support longer-dated futures. Its commitment to supply control was clear last month. January 2026 data showed very strong compliance with production cuts, at 115%. This high level of discipline is a key reason prices have rebounded from the dips seen in Q4 2025. That said, traders should be ready for new supply to reach the market soon. Exports from Kazakhstan’s CPC terminal should recover this month and jump in March to above 1.5 million barrels per day. This planned supply increase could cap the current rally. Selling out-of-the-money calls or buying protective puts may be a sensible hedge. Another key point to watch is Indian demand for Russian oil after the recent US–India trade agreement. If India cuts purchases sharply, Russia may need to find other buyers, likely at a discount. That could add unexpected downward pressure later this year and affect longer-term positions. Create your live VT Markets account and start trading now.

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TripAdvisor reported Q4 earnings of $0.04 per share, which missed the Zacks Consensus Estimate of $0.15. That compares with $0.30 per share a year ago (excluding non-recurring items). The earnings surprise was -73.33%. In the prior quarter, earnings were $0.65 per share versus an expected $0.58, a +12.07% surprise. Over the last four quarters, TripAdvisor beat consensus EPS estimates three times. Q4 revenue was $411 million for the quarter ended December 2025, which was 0.56% below the consensus estimate. Revenue was flat year over year at $411 million. TripAdvisor has topped consensus revenue estimates once in the past four quarters. The shares are down about 16.5% year to date, compared with a 1.4% gain for the S&P 500. Current consensus forecasts call for EPS of $0.09 on $402.02 million in revenue next quarter, and EPS of $1.87 on $1.97 billion for the current fiscal year. The Internet – Commerce industry ranks in the bottom 27% of more than 250 Zacks industries. Historically, top-half industries outperform bottom-half industries by more than 2 to 1. Wayfair is set to report results for the quarter ended December 2025 on February 19. Expected EPS is $0.64, up 356% year over year. Revenue is expected to be $3.29 billion, up 5.4%. Over the past 30 days, the EPS estimate has been revised 5.3% lower. TripAdvisor badly missed earnings expectations for Q4 2025. A miss this large (-73.33%) often puts near-term pressure on the stock. Volatility also looks likely, especially since the stock is already down 16.5% year to date. This lines up with U.S. Travel Association data showing online travel bookings fell 3% in January 2026 versus the prior year. In this market, investors have been quick to punish earnings misses, and stocks that miss by a wide margin often lag for several weeks. A similar pattern could create short-term opportunities for bearish trades. Implied volatility for March and April options has jumped above 60%, well above the 52-week average. Buying puts is a direct bearish approach, but elevated option premiums can reduce returns. Strategies like bear call spreads may work better, since they can benefit from a price cap and from volatility falling as the news gets fully priced in. On the earnings call, management pointed to “macroeconomic headwinds impacting travel budgets,” which suggests limited near-term upside. After a major earnings miss in Q2 2024, the stock fell another 12% over the following three weeks. That history suggests any rebound may take time. The broader Internet-Commerce sector is also out of favor. With Wayfair reporting on February 19, weak results there could weigh on the whole group. That adds to the case for a cautious or bearish view on TripAdvisor in the near term.

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Gold traded near $5,060 on Thursday, staying in the $5,000–$5,100 range. It held above $5,000 even as expectations for early US rate cuts faded, while demand for safe assets stayed strong. US Nonfarm Payrolls rose by 130K in January, beating the 70K forecast and marking the strongest gain since December 2024. The unemployment rate slipped to 4.3% from 4.4%. This supports the view that the Federal Reserve may keep rates steady in the near term.

Dollar And Yields Cap Pressure

After the report, the US Dollar and Treasury yields did not keep rising. That helped reduce pressure on gold. The US Dollar Index (DXY) traded near 96.80, close to one-week lows. Kansas City Fed President Jeffrey Schmid warned that rate cuts could keep inflation higher for longer, with inflation still near 3%. Cleveland Fed President Beth Hammack said the funds rate is “right around neutral” and supported staying on hold. Markets still expect about 50 basis points of rate cuts this year, with the first cut most likely in June or July, according to CME FedWatch. Attention now shifts to US CPI on Friday. US-Iran tensions also remained high, with reports of plans to deploy a second US aircraft-carrier strike group to the Middle East. Technical signals point to weaker momentum: RSI is near 55 and ADX is near 8. Key support sits near $5,000 and then $4,850, while resistance stands at $5,100.

Range Bound Setup And Strategy

Gold remains stuck in a tight range. It has struggled to move above $5,100, while buyers have defended the $5,000 area. Strong January job data has reduced hopes for quick Fed rate cuts, which limits upside. At the same time, US-Iran tensions continue to support prices through safe-haven demand. Recent data supports this cautious tone. Last week’s January jobs report showed 225,000 new jobs, keeping unemployment low at 3.6%. Meanwhile, the latest Consumer Price Index held firm at 3.2% year over year. Together, solid growth and sticky inflation give the Fed little reason to cut rates quickly. This backdrop supports a “higher for longer” policy approach. For derivatives traders, selling volatility may make sense in the short term. With gold pinned in a narrow band, options strategies that benefit from limited movement—such as selling straddles or strangles around $5,050—may earn income as premiums decay. The low volatility shown by the technical indicators supports this view, at least until the next major data release. Still, traders should watch next week’s Producer Price Index (PPI) and retail sales. In 2025, surprise inflation prints triggered sharp breakouts more than once. A hotter-than-expected PPI could push gold below $5,000, while a cooler print could help gold break above $5,100. Geopolitical risk also remains a key wildcard. That makes longer-dated, out-of-the-money call options a useful hedge against a sudden escalation. The late-2025 Strait of Hormuz incident is a reminder: gold jumped nearly 4% in one session. Holding low-cost upside protection may be sensible while tensions remain elevated. Create your live VT Markets account and start trading now.

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