Gold fell to around $5,045 in early Asian trading on Wednesday after a sharp sell-off. Markets are focused on the delayed US January jobs report, which was pushed back because of a four-day government shutdown. Stronger risk appetite and a firmer US dollar could keep pressure on gold. However, tensions between the United States and Iran may limit further declines.

Us Iran Tensions In Focus

Donald Trump said Iran could face military action if it does not meet US demands on nuclear enrichment and ballistic missiles. Iran’s security chief, Ali Larijani, met Oman’s sultan, Haitham bin Tariq Al Said, after talks between US and Iranian officials last week. Traders are also waiting for US inflation data and any news that could affect Federal Reserve policy. Wednesday’s jobs report is expected to show Nonfarm Payrolls rising by 70,000 in January, with unemployment unchanged at 4.4%. US CPI inflation data is due on Friday. A softer reading could weaken the dollar and support dollar-priced gold. Gold is often used to preserve value and to hedge against inflation and currency weakness. Central banks are the largest holders of gold and have increased reserves in recent years. They added 1,136 tonnes worth about $70 billion in 2022, the biggest annual purchase on record.

Central Bank Buying Supports The Floor

Gold has taken a hard hit, falling to around $5,045. The key question now is whether this level will hold. The delayed US Nonfarm Payrolls report is the main near-term driver, because it could set off the next big move. A weak result, such as the expected 70,000 jobs, could spark a rebound. A much stronger report could push prices lower. US-Iran tensions may also help put a floor under gold, limiting downside risk. Open interest in call options with strike prices above $5,100 has risen 8% over the past week. This suggests some traders are positioning for a possible flare-up. The setup is similar to the sharp price spikes seen during Middle East escalations in 2024 and 2025. After the jobs report, Friday’s Consumer Price Index will be just as important for expectations around the Fed. January core CPI was slightly higher than expected at 3.1%. Another strong reading could support the US dollar and weigh on gold. The dollar index is also worth watching, as its recent move above 105 points to underlying strength. Steady central bank demand continues to provide longer-term support. The World Gold Council’s final report for 2025 showed central banks added another 950 tonnes to reserves, the third-highest year on record. This kind of buying suggests large sovereign players may treat big price dips as opportunities. With mixed signals and major data risk ahead, a rise in volatility looks likely. The market is already pricing in a larger move, with implied volatility on at-the-money March options rising to a three-month high. Traders may consider strategies such as straddles, which aim to benefit from a large swing in either direction after this week’s data releases. Create your live VT Markets account and start trading now.

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The Chinese yuan has risen for 11 straight weeks, pushing USD/CNY close to 6.90—a level last seen in May 2023. The move is tied to expectations that more capital will return to Chinese assets after regulators told local banks to limit U.S. Treasury (UST) holdings. Policy has also helped. The People’s Bank of China (PBoC) has allowed a stronger yuan through its daily fixing. At the same time, conditions in the property sector remain weak.

Policy Lift Versus Economic Drag

Among China’s top 100 land buyers, land purchases fell 50% year on year to CNY58bn in January. The group also signaled a cautious outlook for 2026. The 11-week rally has brought USD/CNY to a key inflection point near 6.90. This level is both a technical and psychological barrier. It also highlights a clear tension: strong, policy-driven momentum versus weakening economic fundamentals. Traders now face a simple question—does 6.90 break, or does it hold? The bullish case for the yuan is supported by capital flows. Fourth-quarter 2025 data showed net portfolio inflows of more than $60bn. These inflows were boosted by guidance for local banks to reduce U.S. Treasury holdings. Total UST holdings fell below $770bn for the first time in more than a decade. This repatriation push suggests USD/CNY could stay under pressure in the near term. But the fundamentals—especially in property—remain very weak. The 50% drop in January land purchases is now joined by reports that new home sales in tier-1 cities fell 35% over the same period. This is a major headwind. Policy support can help the currency for a time, but it cannot offset a weak property market indefinitely.

Trading Risk Around Key Levels

A similar setup appeared in early 2025. A policy-led rally reversed sharply after manufacturing PMI missed expectations for two straight months. The PBoC has tolerated a stronger yuan through its daily fixings, but that support may fade if the real economy shows more stress. That makes February manufacturing data a key release to watch. With uncertainty high, traders may want to manage risk around 6.90 with options. USD/CNY put options can benefit if the yuan keeps strengthening and breaks through this level. USD/CNY call options provide upside exposure if weak data stalls the rally and triggers a sharp reversal. Create your live VT Markets account and start trading now.

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South Korea’s unemployment rate fell to 3% in January, down from 4% in the prior period. This decline is a clear sign that the labor market is tightening. The data is stronger than expected and suggests the economy may be running hot. That can push wages and inflation higher. As a result, we should expect the Bank of Korea to take a more hawkish stance in upcoming meetings. This report comes after a year in which inflation stayed above the central bank’s 2% target. In late 2025, the consumer price index averaged 3.1% in the fourth quarter. The Bank of Korea highlighted this risk in its most recent meeting. With unemployment now lower, the odds of an interest rate hike to cool the economy have risen. **Potential market positioning** – **Korean won (KRW): bullish** Higher rates can make the won more attractive to foreign investors. Consider long KRW versus the U.S. dollar. One way to express this view is with USD/KRW put structures or KRW call exposure, targeting a move below the 1,320 level. – **KOSPI 200: cautious to bearish** A hawkish central bank can weigh on stocks. Higher borrowing costs can pressure corporate profits. Consider buying put options on the KOSPI 200 as a hedge, or as a directional view that the index may retreat from recent highs. – **Korea Treasury Bond (KTB) futures: bearish bonds** The most direct way to trade rate expectations is via KTB futures. If rate hikes become more likely, yields may rise and bond prices may fall. Short positions in 3-year KTB futures would align with this scenario.

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GBP/USD fell on Tuesday after rebounding from 1.3510 on Monday. The pair closed at 1.3641, down 0.39%. It dropped from 1.3700 and formed a bearish daily candle near the 50% Fibonacci retracement of the 1.3869–1.3510 move, around 1.3690. The price is still above the 50 EMA at 1.3512 and the 200 EMA at 1.3352. However, the pullback from 1.3869 has created a lower-high pattern, which could weaken the uptrend.

BoE Policy And Uk Politics

The Bank of England has turned more dovish after a close 5–4 vote to keep rates at 3.75%. The Pound is also under pressure because of UK political uncertainty tied to Prime Minister Starmer’s leadership. The Stochastic Oscillator (14, 5, 5) is at 51.21/57.04. %K has crossed below %D while still in neutral territory, which suggests softer momentum heading into Wednesday. On Wednesday at 5:30 AM, the BLS will release the delayed January NFP report. The consensus forecast is 70K, up from 50K in December. The release also includes the benchmark revision, the unemployment rate (4.4%), and earnings (0.3% MoM, 3.6% YoY). At 11:00 PM, the UK will publish preliminary Q4 GDP (0.2% QoQ vs. 0.1% previously), December GDP (0.1% MoM), and December industrial and manufacturing output (both 0% MoM). Three Fed speakers—Schmid, Bowman, and Hammack—are also scheduled.

Strategy Outlook And Risk

GBP/USD is showing signs of fading strength near 1.2750 and is struggling to hold recent gains. This setup looks similar to early 2025, when a rebound stalled near 1.3700. Momentum appears to be turning, which suggests rallies may be brief and could offer chances to position for further weakness. The main driver is the widening policy gap between a cautious Bank of England and a steadier Federal Reserve. UK inflation for January 2026 came in at 2.9%, supporting the view that the BoE may need to cut rates sooner rather than later. In contrast, the US remains firmer: last week’s jobs report showed 210,000 new payrolls, and inflation is still sticky at 3.2%, giving the Fed little reason to ease. With this backdrop, volatility may rise, which can make options more appealing. Buying GBP/USD put options could help protect against a move down toward the 1.2600 support area in the coming weeks. This lets traders cap risk while still benefiting if the Pound weakens. This pattern also echoes February 2025, when a dovish 5–4 BoE split helped cap Pound strength. UK Q4 GDP at that time was just 0.1%, which supported a bearish view. Today’s environment looks similar, with slowing growth again pushing the BoE toward a more dovish stance. Create your live VT Markets account and start trading now.

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USD/JPY fell 0.95% on Tuesday, bringing the two-day decline to 2.3% from peak to trough. Traders are positioning ahead of Wednesday’s US Non-Farm Payrolls (NFP) release. On the daily chart, the pair is still choppy and stuck in a range. The top is the January high near 159.450, and the bottom is the late-January low at 152.100. It closed Monday at 154.410, down 1.47 yen (0.94%). An early gap higher faded after comments from Finance Minister Katayama and currency official Mimura about responding to yen volatility.

Technical Picture And Key Levels

Monday printed a bearish engulfing candle and pushed below the 50-day Exponential Moving Average (EMA) at 155.800. The 200 EMA at 151.920 is still rising and remains the main longer-term support. The Stochastic Oscillator (14, 5, 5) is near the midpoint and trending lower. Key support sits at 154.00, then 153.00 to 153.50, and then 151.920. Resistance is at 155.80, followed by the 157.00 to 157.500 zone. Wednesday’s delayed January NFP is expected at 70K versus December’s 50K. Unemployment is seen at 4.4%, and an annual benchmark revision is also due. Three Fed speakers (Schmid, Bowman, Hammack) are scheduled for Wednesday, and Japan’s Q4 GDP is due later in the week. Looking back at the volatility in early 2025, the market was already preparing for a major policy shift. The verbal interventions after Prime Minister Takaichi’s election signaled that Japanese officials viewed 159 as a hard limit. That area capped price for the rest of last year, training traders to sell rallies near that zone. Now, on February 11, 2026, the backdrop has changed, but those levels still matter. The Federal Reserve started cutting rates in the second half of 2025, which has steadily narrowed the rate gap between the U.S. and Japan. Even so, recent U.S. data has remained strong. The January 2026 NFP report showed a standout 295,000 jobs added, which makes the Fed’s next steps less clear.

Policy Shift And Trade Implications

The biggest change came from the Bank of Japan. In November 2025, it finally ended negative interest rates, a shift that has changed long-term sentiment for the yen. Combined with the Fed’s easing cycle, this creates a structural headwind for USD/JPY. As a result, traders may treat rallies toward the 153–155 area as potential selling opportunities. With that in mind, derivatives traders may prefer strategies built for range trading or a slow grind lower, rather than a sudden selloff. Selling out-of-the-money call options, or using bear call spreads with strikes above 155, can collect premium while keeping risk defined in case U.S. data surprises to the upside. Implied volatility is still high compared with historical averages, which supports premium-selling approaches. It is also important to remember that the rate differential still favors the dollar. That makes it costly to hold outright short USD/JPY positions because of negative carry. Options can express a bearish-to-neutral view while helping manage carry costs and benefit from time decay. Use the resistance zones established in 2025 as a guide when structuring trades in the weeks ahead. Create your live VT Markets account and start trading now.

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NZD/USD traded near 0.6050 on Tuesday after rallying from the late November low around 0.5580. The pair is still above the 50-day EMA at 0.5874 and the 200-day EMA at 0.5845. Monday closed at 0.6043, down 0.21%. The pair hit 0.6094 in late January. For the past two weeks, it has moved in a range between about 0.6000 and 0.6094. A break above 0.6094 would point to the 52-week high near 0.6122. Support is at 0.6000, then 0.5950 and 0.5874.

New Zealand Labour Data And RBNZ Outlook

New Zealand labour data showed unemployment rising to a 10-year high of 5.4%, while employment grew 0.5%. The RBNZ meets on Wednesday, 18 February. The Official Cash Rate is expected to stay at 2.25%, and markets do not price the first hike before October. US January Non-Farm Payrolls are due Wednesday after being postponed from 6 February to 11 February. The consensus is 70K, compared with 50K previously. Other forecasts include 4.4% unemployment, earnings growth of 0.3% month-on-month and 3.6% year-on-year, plus an annual benchmark revision. Fed remarks are also expected from Schmid, Bowman and Hammack. The Kiwi is holding near 0.6050, but the picture has changed after the US Non-Farm Payrolls release. The report was a major miss, showing a loss of 15,000 jobs versus an expected gain of 70,000. The unemployment rate also rose to 4.5%. This kind of result often weakens the US Dollar and can increase pressure on the Federal Reserve. This weaker US data makes an early test of the 0.6094 resistance level likely. Traders looking to position for more upside may consider call options with a strike at or above 0.6100 to capture the move. A similar NFP miss in Q3 2025 sparked a sharp rally, and the market could react in a similar way again.

Key Risks And Technical Levels Ahead

The next key event is the Reserve Bank of New Zealand meeting on February 18, where the new governor must weigh rising domestic unemployment. The latest Global Dairy Trade auction showed a small price gain of 0.8%. However, China’s PMI slipped into contraction at 49.8, which signals softer demand from New Zealand’s largest trading partner. That could limit further gains and make selling call spreads above 0.6150 a possible way to benefit if momentum fades. The daily chart still looks bullish, but the Stochastic Oscillator was already near overbought before the US data. A break above 0.6094 looks possible, but the 52-week high near 0.6122 may be a tough hurdle given the mixed signals from New Zealand. If the pair cannot push higher, the key level to watch is the 0.6000 psychological support. Create your live VT Markets account and start trading now.

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US Treasury yields fell across the curve. The 10-year note dropped nearly six basis points to 4.141%. The 10-year yield is on track for a fourth straight day of declines. The move followed weaker US economic data.

Cooling Data Drives Rate Cut Expectations

US Retail Sales in December were flat at 0% and came in below estimates. The Employment Cost Index for Q4 2025 rose 0.7% quarter-on-quarter, down from 0.8% in Q3 and below forecasts. After the data, money markets priced in 58 basis points of rate cuts, based on Chicago Board of Trade data. Comments from regional Fed presidents Lorie Logan and Beth Hammack did not push yields higher, and they helped limit losses in the US dollar. The US Dollar Index was 96.84, unchanged. Five-year inflation expectations were 2.5% based on the 5-year breakeven rate, while the 10-year breakeven rose to 2.35%. Focus is now turning to January US Nonfarm Payrolls, due on Wednesday. Forecasts call for 70K job gains versus 50K in December, with the unemployment rate expected to hold at 4.4%.

Positioning For Further Rate Declines

We saw this trend strengthen late last year as soft economic data kept coming in. The weak December 2025 retail sales report and the softer Employment Cost Index both point to a cooling economy. This supports our view that the Federal Reserve may need to restart its easing cycle. January’s Nonfarm Payrolls report added to that view, with job gains of 60,000, below expectations. This suggests the labor market is slowing, which pushed the 10-year Treasury yield down toward 4.05% in the first week of February. The dollar also weakened, with the DXY now near 96.10. With this backdrop, we expect rates to face more downward pressure in the coming weeks. Strategies such as buying calls on Treasury note futures, or using interest rate swaps to receive floating and pay fixed, may benefit from falling yields. Recent inflation data also supports this view. January’s Consumer Price Index, released this week, showed inflation of 2.6% year-over-year, below the 2.8% consensus forecast. That gives the Fed more room to cut rates without a sharp rise in inflation. This looks similar to mid-2019, when weakening global data led the Fed to shift from tightening to easing. History shows that once this shift starts, markets often price in cuts faster than the Fed first signals. We see a similar pattern forming now. Uncertainty about the timing of the first cut has also lifted bond market volatility. The MOVE Index has risen from the low 80s to around 98 over the past month. That means options markets are pricing in bigger swings in Treasury yields. One way to take advantage of this higher volatility is to sell out-of-the-money puts on Treasury futures to collect premium. Looking ahead, the March Fed meeting is the next key event. CME FedWatch Tool data shows the market is pricing in an 80% chance of a 25-basis-point cut at that meeting. Until then, each new data release will be judged by whether it supports—or challenges—that expectation. Create your live VT Markets account and start trading now.

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AUD/USD has paused after climbing to 0.7099 and then slipping to around 0.7072. It is still above the 50 EMA at 0.6797 and the 200 EMA at 0.6611. The current uptrend began near 0.6421. The pair has surged from about 0.6500 and moved above 0.7000 for the first time since February 2023. The growing gap from the 50 EMA suggests the move may be overextended. This comes as the RBA raised rates by 25 basis points to 3.85%, while the Fed has signaled a more dovish path.

Technical Levels And Momentum

The Stochastic Oscillator (14, 5, 5) is near overbought, which suggests momentum may slow. Resistance is at 0.7099, followed by the 2023 high near 0.7157. Support is at 0.7000, then around 0.6950 and 0.6896. Attention had turned to US January Non-Farm Payrolls on Wednesday, delayed from February 6 to February 11 due to a partial government shutdown. Forecasts called for 70K versus December’s 50K, along with an annual benchmark revision and unemployment data. Fed speakers Schmid, Bowman, and Hammack were also scheduled. The AUD is driven by RBA policy and its 2–3% inflation target, demand from China, and iron ore exports worth about $118 billion a year (2021). The trade balance and broader risk sentiment also influence the currency. The rally has now paused more clearly, as today’s US Non-Farm Payrolls report was far stronger than expected. Markets looked for a 70K gain, but the figure came in at 353K. That triggered a sharp reversal from the 0.7100 area and has led traders to question the Fed’s dovish outlook.

Options Positioning After The Data

We view this pullback as a healthy correction after the steep, uninterrupted climb from the 0.6500 area seen in late 2025. The overbought stochastic oscillator was an early warning, and the strong US jobs report provided the trigger. The pair is now testing the key 0.7000 level as near-term support. For derivatives traders, this shift may favor buying put options to hedge long positions or to position for a deeper move toward 0.6950 support. If strong US data delays Fed rate cuts, the policy gap with the RBA may narrow. That divergence has supported this rally, so a shift could weigh on AUD/USD in the weeks ahead. On the other hand, the dip may appeal to traders still bullish on the longer-term trend. Buying call options with strikes near current levels can be a lower-cost way to position for a rebound. The RBA cash rate is still firm at 4.35%, which supported the currency through the last quarter of 2025. China also remains a key factor. Recent PMI data has not shown steady expansion. While iron ore prices have stayed supportive and have recently traded above $120 per tonne, weaker Chinese industrial activity could limit further strength in the Aussie dollar. With mixed fundamental signals, volatility risks remain elevated. Now that the event has passed, implied volatility—often elevated ahead of NFP—will likely ease. This can make strategies such as selling covered calls against existing long positions more attractive for income. It also fits a scenario where the pair consolidates as markets digest today’s surprise jobs report. Create your live VT Markets account and start trading now.

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In a pre-recorded Fox Business interview, US President Donald Trump said a two-percentage-point cut in interest rates would eliminate the US national deficit. He said each percentage point is worth about $600 billion. He added that a two-point cut could close the deficit without any spending cuts. He said the US should have the lowest interest rates in the world and that rates should be 2 points lower right now. He also said he expects 2026 to be “great”.

Federal Reserve Independence Market Volatility

Trump said stock market gains are positive and that markets should rise on good news. He said the US has had a strong run and he wants it to continue. He said Kevin Warsh agrees with his views and could be an influencer. He also said employment data remains solid, even after government job cuts. On Iran, Trump said Iran wants to make a deal. He said it would be foolish for Iran not to do so. There is now a clear, public push for the Federal Reserve to cut rates by a full two percentage points. This direct call changes the market backdrop and raises questions about the Fed’s independence. We should expect more volatility around upcoming Fed meetings and announcements.

Positioning For Rates Currencies And Oil

This follows the Fed’s decision to hold rates at 3.75% at its January 2026 meeting. The Fed cited core inflation that is still slightly above target. The latest Consumer Price Index showed inflation running at 2.8% year over year, which has kept the Fed cautious. Calling for a large cut directly challenges the Fed’s data-dependent approach. Because of this, it may make sense to look at options on SOFR futures, since implied volatility in the coming months is likely to rise. One possible strategy is buying calls or call spreads on Treasury bond ETFs like TLT. If the market starts to price in these cuts, bond prices could rise. The added political pressure could also push the Fed to act sooner than expected. We saw something similar in 2018 and 2019, when presidential pressure came before the Fed shifted from raising rates to cutting them. That stretch included sharp swings in equities. History suggests we should be ready for choppy trading, followed by a possible rally if the Fed pivots. For equity traders, this is a cue to watch rate-sensitive areas like technology and growth stocks. These names did well during the near-zero rate period of 2020–2021 and could attract interest again. We may consider building exposure over time using call options on the Nasdaq 100. The mention of Kevin Warsh as a possible influencer is an important signal about future plans. Warsh is seen as favoring easier policy, which suggests future Fed picks could support a low-rate agenda. This longer-term view strengthens the case for a weaker dollar. In currencies, a two-point cut would likely weaken the US dollar. EUR/USD has traded in a tight range near 1.09 over the past month. These comments could be the trigger for a breakout, which may make long euro positions more attractive. Trump’s comment that Iran is willing to make a deal adds another factor that could reduce geopolitical risk. Any agreement could push oil prices lower. Oil has been hovering near $85 a barrel. This supports looking at put options on crude oil futures or considering short exposure to the energy sector. Create your live VT Markets account and start trading now.

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Singapore’s 4Q25 GDP was revised up. This lifted full-year 2025 growth to 5.0%. UOB raised its 2026 GDP forecast to 3.6% from 2.6%. The Ministry of Trade and Industry (MTI) also increased its 2026 forecast range. MTI’s Composite Leading Index rose in 4Q25 to 3.7% quarter-on-quarter, up from 3.2% in 3Q. This suggests stronger seasonally adjusted quarter-on-quarter GDP growth in 1Q26.

Outlook For 2026 Growth

UOB’s baseline expects strong seasonally adjusted quarter-on-quarter growth in 1Q26, weaker growth in 2Q26, and only very small gains in 3Q–4Q26. Under this baseline, the output gap is expected to stay positive in 2026 at 1.0%, slightly lower than 1.2% in 2025. A positive output gap supports the view that the Monetary Authority of Singapore could make a one-off move in April 2026. The expected move is a 50 bps steepening of the S$NEER policy band slope to 1.0% per year. The goal would be to bring the S$REER closer to its equilibrium level, not to start a long series of tightening steps. Singapore’s economy is doing much better than earlier estimates suggested. The large upward revision to 4Q25 GDP lifted full-year 2025 growth to a strong 5.0%. In response, we raised our 2026 growth forecast to 3.6%, reflecting solid momentum going into the year. Recent data for early 2026 supports this view. January’s manufacturing PMI came in at 50.8, the fifth straight month of expansion, which points to steady factory activity. January non-oil domestic exports (NODX) rose 4.5% year-on-year, beating expectations and showing that external demand remains firm.

Implications For Mas Policy

Economic strength, shown by a positive output gap, increases the chance of a Monetary Authority of Singapore (MAS) policy response. Core inflation also edged up in January to 3.3%, adding to the pressure to act. We therefore expect MAS to tighten policy at its April meeting. The most likely step is to steepen the slope of the S$NEER policy band. This would allow the Singapore dollar to appreciate faster against its trading partners. In past cycles, the SGD often strengthened in the weeks before pre-announced tightening moves, including in 2022. This suggests there may be an opportunity ahead of the April decision. For traders, this points to a bias toward a stronger SGD in the coming weeks. One approach is to position for SGD strength using derivatives, such as SGD call options against the USD. Because many expect a policy move, implied volatility could rise as well, which may support long-option strategies. That said, we see this as a likely one-off adjustment to guide the currency closer to fundamental value, not the start of a long tightening cycle. As a result, option strategies may be best timed with expiries around, or shortly after, the April policy decision. This could capture the expected pre-meeting move while limiting exposure if MAS signals a pause afterward. Create your live VT Markets account and start trading now.

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