Pending home sales in the United States rose by 2.6% in November, compared to a drop of 0.4% the previous year.
Gold prices fell significantly after hitting record highs, but remain above $4,300. This drop was influenced by profit-taking and hopes for a peace agreement between Ukraine and Russia.
Cryptocurrency Market Update
In the cryptocurrency market, Bitcoin, Ethereum, and Ripple saw gains of about 3%. Their rise occurred despite low trading volume, boosted by peace talks between the US and Russia.
Looking ahead, the economic outlook for advanced countries in 2026 looks bright. Many positive factors from 2025 are expected to carry over, supporting economic growth.
The crypto market in 2026 may be unpredictable. Some positive influences could be new regulations in the US, the growth of Digital Asset Treasuries, and the increasing use of AI and the tokenization of Real-World Assets.
Several guides for 2025 detail the top brokers for different trading styles. These include brokers with low spreads, those focused on EUR/USD and gold trading, and those offering Islamic and swap-free accounts.
US Pending Home Sales Increase
The recent increase in U.S. pending home sales to 2.6% year-over-year in November indicates a potential stabilization in the housing market. This uptick follows a prolonged pause on interest rates in 2024. We need to pay close attention to the upcoming Federal Reserve minutes; any indication of possible rate cuts in 2026 could lead to significant shifts in interest rate futures.
As the year closes with low trading volume, market volatility has lessened. The CBOE Volatility Index (VIX) hovered around a low of 12 at the end of 2023. With positive economic forecasts for 2026, this might be a good time to sell options premium on stock indices. This strategy allows us to generate income during a quiet market while setting up for potential growth in the new year.
Gold is sharply falling from its peak of $4,550, which is much higher than the previous record of about $2,400 seen in mid-2024. This decline is driven by profit-taking and increasing hopes for a peace deal between Russia and Ukraine. Buying put options on gold could be advantageous, as a confirmed agreement would likely lower much of the geopolitical risk that led to its high price.
The potential for a peace deal is also impacting currency markets by reducing the U.S. dollar’s status as a safe haven. While the dollar is currently stable, a strong resolution to the conflict could strengthen riskier currencies like the euro and pound. This suggests we should prepare for possible dollar weakness as we move into the first quarter of 2026.
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In November, pending home sales in the United States rose by 3.3%, which was much higher than the expected 1%. This indicates a positive shift in the housing market.
The Dollar stayed strong after dropping from its record highs, losing over 3% in one day. At the same time, gold traded below $4,400, with optimism about peace talks between Ukraine and Russia affecting its prices.
Crypto Markets React Positively
Cryptocurrency markets enjoyed a boost on Monday, with Bitcoin, Ethereum, and Ripple rising by about 3%. This increase happened despite low trading volumes during the holiday season, as peace talks between the US and Russia continued to create a supportive atmosphere.
Bitcoin and major altcoins turned bullish as selling pressures eased. Economic forecasts for 2026 suggest strong growth in developed countries, thanks to stabilizing factors emerging from 2025.
The crypto market saw a turbulent 2025; however, positive regulatory changes in the U.S. and other advancements suggest a bright future. Digital assets are also benefiting from developments in Treasury management and AI adoption.
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Unexpected Economic Strength
The November home sales report showed a surprising increase of 3.3%, much stronger than the expected 1%. This suggests that the US economy is gaining more momentum as we head into 2026, based on the steady growth we observed throughout 2025. This unexpected strength might lead the Federal Reserve to reconsider the planned 75 basis points rate cuts for next year.
While the overall economic outlook for 2026 looks solid, we’re noticing some year-end weaknesses in AI stocks, which have recently pulled down the Dow. This appears to be simple profit-taking after a significant rise, similar to trends we have seen in other high-growth sectors at the end of 2023. This dip could be a chance to prepare for a potential rebound in early January when market liquidity returns.
Gold’s quick drop from its record high over $4,500 is typical for the holiday market, likely intensified by low trading volumes. Profit-taking and optimism regarding peace talks contributed to this sudden decline, especially after a historic rally in 2025 that saw prices nearly double from 2024. Options traders might see this increased volatility as a chance to sell premium, betting that prices will stabilize as markets settle.
The strong US housing report boosts the case for the US Dollar against currencies like the Pound Sterling. The Federal Reserve has less reason to cut rates aggressively compared to the Bank of England, which is facing a lagging economy. We should expect the Dollar’s strength to continue into the new year, presenting potential opportunities in currency futures.
Crypto markets like Bitcoin and Ethereum are benefiting from renewed strength, reacting positively to the same geopolitical factors affecting gold. This uptrend builds on a volatile 2025, which was ultimately backed by meaningful regulatory progress and asset tokenization. This sensitivity to macroeconomic news is expected to continue, creating opportunities in futures and options for those who anticipate volatility.
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The EUR/JPY pair is trading at around 183.80, down by 0.25%. This drop is linked to the Japanese Yen gaining strength, thanks to signals from the Bank of Japan about possible future rate hikes.
After the Bank of Japan raised its interest rate from 0.50% to 0.75%, some policymakers discussed the need to stick with a tightening approach. A few even suggested there could be more hikes by 2026. In contrast, the European Central Bank (ECB) has kept interest rates steady, focusing on a cautious, meeting-by-meeting strategy due to ongoing uncertainty.
Impact Of ECB Policy On Euro
The ECB’s clear commitment to maintaining its current policy has helped stabilize the Euro, reducing fears of further losses. Currently, the market sees less than a 10% chance of a rate cut by the ECB in February.
The chart shows the Japanese Yen has strengthened against several major currencies, notably rising 0.75% against the New Zealand Dollar. This illustrates how monetary policy decisions impact currency trading. You can see each currency’s movement as percentage changes against others for better insights.
As we approach the last trading days of 2025, the Bank of Japan’s hawkish stance remains a key factor for the Yen. Their recent increase in December to 0.75% is the highest level in over twenty years. Minutes from the meeting suggest more tightening might be on the way in 2026. This difference in policies with other central banks is likely to boost the Yen’s strength into the new year.
To support this view, we can look at Japan’s core inflation from November 2025, which stood at 2.8%. This rate is persistently above the BoJ’s 2% target, unlike the trends of 2023 and 2024. The central bank clearly has a solid basis for action. This shift in policy is genuine, and the market is still adjusting to this change.
Strategy For EUR/JPY Options
On the other side of the pair, the European Central Bank is hinting at stable policies, which supports the Euro but doesn’t provide a strong reason for it to rise significantly. Recent flash PMI data for the Eurozone showed manufacturing in contraction at 48.2, and inflation is steady at around 2.4%. This justifies the ECB’s decision to hold steady. While this offers a solid base for the Euro, the momentum is clearly with the Yen.
Given this situation, traders might consider buying put options on the EUR/JPY for expiries in January and February 2026. This strategy allows for potential profit from further declines in the pair while limiting possible losses. Strike prices around 182.00 or 181.50 could strike a good balance of risk and reward based on the current price of 183.80.
The differences in central bank policies are expected to raise implied volatility in the upcoming weeks, especially after the holiday season when liquidity improves. We’re already noticing that one-month volatility for EUR/JPY has increased from the lows seen earlier in the fourth quarter of 2025. Higher volatility makes options more costly, so establishing your positions sooner could be beneficial.
Historically, major changes in the Bank of Japan’s policy result in extended periods of Yen appreciation. We saw this when the BoJ ended its negative interest rate policy in early 2024, which led global funds to reposition for several months. The current rate hike cycle appears to be a more aggressive continuation of that initial change.
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Nexa Resources’ shares increased by 6.2% to $9.40 in the last trading session, with higher-than-average trading volume. This rise comes after a 31.1% jump over the past month, following Nexa’s sale of the Otavi Project in Namibia to Midnab Resources.
Nexa Resources is focusing on profitable assets, improving free cash flow, and following its capital allocation strategy. The company is also looking to expand its copper exploration in Namibia, in addition to its projects in Latin America.
Nexa expects to report quarterly earnings of $0.35 per share, which is a 135% increase compared to last year. The company forecasts revenue of $828.12 million for the upcoming report, an 11.8% rise from the previous year.
Research shows a link between earnings estimate changes and stock price trends. Nexa’s consensus earnings per share (EPS) estimate for the quarter has increased by 25% in the last 30 days, indicating potential for further growth.
In the same sector, Globe Specialty Metals fell 0.8% to $4.72, with a 13.6% return over the past month. Globe’s EPS estimate remains at -$0.07, which reflects a 333.3% decline from last year, and its Zacks Rank is rated #4 (Sell).
Given Nexa’s strong momentum and a 31.1% gain over the past four weeks, this signals a bullish outlook for the company. The market rewards Nexa’s strategy of focusing on profitable assets, highlighted by the sale of its Otavi Project. The upcoming earnings report is crucial, particularly with consensus estimates rising 25% in the past month.
Today is December 29, 2025. We should consider option contracts that expire after the next earnings announcement, expected in late February 2026. The recent price increase on high volume suggests that implied volatility is high, making call options pricier. Currently, the implied volatility on NEXA’s front-month options has risen to over 55%, well above its historical average.
This positive sentiment is supported by strong commodity markets, essential for a mining company. Recently, zinc futures on the London Metal Exchange surpassed $3,800 per tonne, a level we haven’t seen since the third quarter of 2025. Copper prices also remain strong, with data showing that exchange inventories have dropped by 8% over the last month.
This situation reminds us of the surge we saw in base metal producers in early 2024 when strong industrial forecasts led to a sector-wide boost. It’s worth noting that this strength seems to be specific to Nexa, as Globe Specialty Metals continues to face negative earnings revisions. This difference indicates we’re backing a company with solid fundamentals, not just benefiting from general market trends.
With the stock at $9.40, selling cash-secured puts with a strike price around $9 for February or March 2026 could be a smart strategy. This allows us to earn premiums while taking advantage of high implied volatility. Alternatively, a bull call spread could help us participate in potential upside while managing our risk if the earnings report underperforms.
Nexa Resources Stock Performance
The Pound Sterling (GBP) is holding steady as the year wraps up, trading at about 1.3500 against the US Dollar (USD). It’s expected that the Bank of England (BoE) will start a slow easing of monetary policy in 2026.
UK Economic Growth and Inflation
The BoE is likely to avoid major interest rate cuts because UK inflation, while falling, is still above the 2% target. In November, inflation decreased to 3.2%, down from a peak of 3.8% between July and September.
UK GDP data shows a growth of 1.3%, which matches expectations and is slightly below the previous figure of 1.4%. This suggests steady economic growth without any signs of speeding up.
For the GBP/USD pair, meeting forecasts means there’s little reason to change the economic outlook. The pound remains stable, with no new buying interest and limited selling pressure.
With the Pound trading around 1.3500 against the dollar, we see a chance in the lack of price movement. The quiet holiday period, with thin trading volume, suggests that selling options could be a smart move. Stable economic data indicates that implied volatility is likely to stay low in the near future.
Market Calmness and Trading Strategy
The Cboe British Pound Volatility Index is currently around 7.5. This is much lower than the levels we saw during the market instability after the 2022 mini-budget. Additionally, overnight index swaps predict just two 25-basis-point cuts from the Bank of England throughout 2026. This suggests no sudden policy changes are coming soon.
The market’s calmness is not surprising since recent data doesn’t indicate a need for significant adjustments. With inflation at 3.2% and annual growth at 1.3%, the Bank of England is in a holding pattern and can’t cut rates significantly. This economic stability keeps the currency within a range, making big bets on price direction with long call or put options less appealing.
As we enter January 2026, trading volumes will normalize, which may lead to some price fluctuations. Strategies like short strangles or iron condors, which profit from the pound staying within certain ranges, appear to be the most suitable. These positions benefit from time decay while limiting our risk in case of unexpected changes.
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Assurant Inc. operates around the world, offering risk management and insurance solutions in housing and lifestyle markets. The company is known for products such as mobile device protection and vehicle service contracts, and it operates in over 20 countries. Its growth journey started in 2008 at $12.52, with several price peaks and corrections since then.
Elliott Wave analysis indicates that wave (III) is currently in progress, with potential targets between $287 and $417. Recently, there was a 7-swing pullback that completed wave ((2)), leading to a new rally. This extended wave ((3)) could target the range of $330 to $380.
In December 2025, a recommendation was made to go long from the blue box, predicting a target of $262 for wave 3. After this point, the price rallied strongly, possibly extending beyond $260. As the bullish trend continues, traders should look for pullback opportunities to buy, using detailed trend analysis across different instruments.
Given the strong rally since early December, we believe the immediate pursuit of upside is over. The initial trade from the blue box has already generated a 10% profit, so securing partial profits was a wise decision. Pursuing the current extension could add unnecessary risk.
The stock’s momentum is supported by fundamentals, as shown in Assurant’s fourth-quarter 2025 earnings report, which highlighted strength in the Global Housing segment. U.S. housing starts increased by 1.9% in November 2025, building confidence in this important market. This economic stability backs the ongoing bullish price movement.
Our next opportunity requires patience, not aggression. We are monitoring the completion of this upward wave, which might occur after one final rise. After reaching that peak, a corrective pullback should provide a better entry point for new long positions.
For derivative traders, this expected dip is an excellent chance to buy call options or create bullish call spreads for the first or second quarter of 2026. With the VIX around 13 this holiday week, option prices are reasonable for positioning before the next wave up. Use the price targets of $330 to $380 as a guide for choosing strike prices.
This short-term strategy aligns with a larger bullish trend that has been developing for years. We view the current movement as part of a major wave that began after the March 2020 lows, built upon the foundation set during the financial crisis in 2008.
Philip Morris International Inc. (PM) is a global tobacco and nicotine company located in Stamford, Connecticut. It sells popular cigarette brands like Marlboro and is shifting towards smoke-free products with its “Beyond Nicotine” strategy. Its leading smoke-free product, IQOS, uses heat-not-burn technology and has gained popularity worldwide. PM operates in over 180 markets, aiming to lessen the health risks of smoking by investing in alternatives and advanced nicotine delivery systems.
Since hitting an all-time low of $32 in March 2009, PM’s stock price has risen dramatically by over 475%, reaching a peak of $186 in June. The stock has shown a clear 3-swing pattern and is set to develop into at least a 5-swing chart, with wave (III) possibly targeting $204 or more. Waves I and II of (III) ended at the high in February 2022 and the low in September 2022. Wave III of (III), starting in September 2022, peaked in June 2025, followed by a pullback.
On October 29, 2025, the price hit the blue box zone and bounced back, signaling the beginning of wave V. The target for wave V is between $197 and $215. On December 29, 2025, the price retested the blue box, surged, and hit the first target at $163.5, with potential to reach $180-$200. This cycle from the low in October is expected to reach $215.
With Philip Morris’ price firmly bouncing from the low in October 2025, our initial target has been achieved, creating a risk-free position for early investors. The recent retest of the buy zone followed by a strong upward move indicates the next phase of the rally is starting. We view this as a chance to add to bullish positions, as the likely trend is upward.
This positive trend is backed by strong fundamentals, as shown in the company’s quarterly report from October 2025. In that report, the user base for IQOS grew to over 33 million, making smoke-free products nearly 40% of total revenues. This ongoing success in its strategic shift supports our bullish outlook.
In the coming weeks, we should consider longer-term call options to take advantage of the anticipated rise to the $180-$200 range. Options expiring in March or April 2026 would provide ample time for the trade to evolve while minimizing time decay. Strike prices around $170 or $175 could offer a favorable balance of risk and reward as this upward wave gains momentum.
Any short-term pullbacks should be seen as buying opportunities, not weaknesses. Historical examples, like the strong rally that began after the low in March 2020, which saw the stock gain over 50% in a year, show that the current setup from the October 2025 bottom might exhibit similar strength and speed.
As the price rises, implied volatility may increase, benefiting long call positions. We will keep a close eye on the price movements as it approaches the previous all-time high set in June 2025. Breaking through this level would signal a major breakout, making way for our ultimate target.
The cycle that began in October is projected to reach $215, which will be our final profit-taking zone for this long-term trade. Until then, we will manage the position, taking partial profits at key resistance levels while allowing the core trade to continue.
The US Dollar has gained a bit against the Canadian Dollar, with the USD/CAD pair moving closer to 1.3700, rising by around 0.20% on Monday. This comes after the pair had been trading near a five-month low at 1.3640, showing only modest demand for the US Dollar at the start of the week, thanks to lower trading volumes.
Support for the Canadian Dollar from higher Oil prices is fading. West Texas Intermediate (WTI) Oil is recovering after recent dips, driven by ongoing geopolitical tensions in the Middle East. However, the Canadian Dollar is having a hard time holding onto its gains due to this loss of support.
Dollar Stability Amid Rate Cuts
The US Dollar is holding steady despite overall pressure, as markets expect the Federal Reserve to cut rates by 2026. A 25-basis-point cut was made in December, bringing the target range down to 3.50%-3.75%. In 2025, a total of 75 basis points in cuts were introduced, responding to a cooling job market and inflation above the target level.
Attention is now focused on the upcoming Federal Open Market Committee (FOMC) Minutes, which are expected to provide insights into policy discussions and future expectations. The Bank of Canada (BoC) is taking a careful approach, as inflation slightly exceeds the 2% target. These differing policy directions keep USD/CAD in a consolidation phase.
With USD/CAD bouncing off recent lows around 1.3640, this appears to be a short-term correction influenced by lower holiday trading volumes. The movement toward 1.3700 is occurring with low trading activity, indicating a lack of strong confidence in the price jump. Traders should be cautious about following this rally, as the broader trend may not have changed.
The overall outlook for the US Dollar remains tied to the Federal Reserve’s actions in 2025. We’ve seen 75 basis points in rate cuts this year, directly reflecting a cooling economy. The November Non-Farm Payrolls report showed job growth slowing to 155,000. However, with the latest CPI inflation data from November still at 2.8%, the Fed isn’t rushing, resulting in this near-term stability for the dollar.
Oil Prices and Canadian Dollar Impact
For the Canadian Dollar, the diminishing support from oil prices is significant this week. WTI crude is struggling to stay above $82 a barrel after last week’s government data revealed a smaller-than-expected decrease in US stockpiles, raising demand concerns. Coupled with Canadian inflation remaining steady at 2.9% in November, the Bank of Canada has little reason to shift its cautious position.
In light of this situation, traders might consider using options in the coming weeks. A trader could take advantage of the current strength in USD/CAD to buy bearish positions, such as put options with February 2026 expiration dates, anticipating a return to the downtrend once market activity picks up. This strategy allows for betting on a weaker US Dollar in the new year, while keeping upfront risk limited.
The upcoming FOMC minutes will be a key event early in 2026. We’ll be watching for any discussions among policymakers that might indicate the pace of future rate cuts. If USD/CAD fails to break and hold above the 1.3720 resistance level in the next few days, it could suggest that this current rebound is weak and that sellers are ready to step back in.
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EUR/USD is currently on a downward trend, pulling back from its pre-Christmas highs in a session with low trading volumes. The currency pair is hovering around 1.1760 after reaching just above 1.1800 last week. This shift is driven by the strengthening of the US Dollar and ongoing geopolitical tensions between China and Taiwan.
A recent meeting between US President Trump and Ukrainian President Zelenskyy has sparked hopes for peace in Ukraine, giving some support to the Euro. At the same time, speculation about the Federal Reserve potentially cutting interest rates next year is impacting the recovery of the US Dollar. Investors are closely watching the minutes from the Fed’s December meeting.
Economic Performance and Geopolitical Tensions
Increasing tensions from Chinese military exercises near Taiwan have heightened demand for the US Dollar as a safe investment. Economic data reveals that US Pending Home Sales for November are expected to rise by 1%. Additionally, the GDP for the third quarter surpassed estimates, showing a growth of 4.3% annually.
Technically, EUR/USD is nearing support at 1.1755, where bearish traders see opportunities. Resistance is found around the 1.1805 level, with more bullish challenges at 1.1820. The Euro is influenced by key economic indicators, including GDP and trade balance figures.
As of December 29, 2025, EUR/USD is retreating during this quiet holiday trading period. The downturn is influenced by short-term demand for the US Dollar due to rising military activities by China near Taiwan. This situation could lead to increased short-term volatility, even in low trading volume periods.
For derivative traders, this creates an opportunity to prepare for possible price fluctuations in early January. According to Cboe’s EuroCurrency Volatility Index (EVZ), which typically rises during uncertain times, there has been a slight increase. This suggests that option premiums may become more expensive. Traders might consider buying near-term put options with a strike price below 1.1755 to hedge against or capitalize on further declines driven by geopolitical tensions.
Central Banks and Market Strategy
However, the broader context is shaped by differing central bank policies. The Federal Reserve has cut rates this month and indicated more reductions are likely in 2026. This weakening long-term appeal of the US Dollar is confirmed by recent data from the CME FedWatch Tool, showing an 85% probability of at least two rate cuts in 2026. In contrast, the European Central Bank remains firm, with core inflation stable at 2.7% in November 2025.
This economic backdrop supports a positive outlook for EUR/USD once holiday trading comes to an end and attention shifts back to monetary policy. A possible strategy for the upcoming weeks could be to sell out-of-the-money puts expiring in late January, taking advantage of premium collection based on the expectation that the 1.1700 level will serve as solid support. Alternatively, buying long-dated call options with a strike price above 1.1820 would position traders for a likely resumption of US Dollar weakness in the new year.
We should exercise caution ahead of this week’s release of the Fed’s December meeting minutes. Any less dovish statements than expected could trigger a sharp, though temporary, rally in the US Dollar. Therefore, utilizing options strategies such as strangles or straddles might be wise, allowing traders to profit from significant price movements in either direction while managing risk effectively.
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The Euro is trading near two-month lows at around 0.8700 after struggling to maintain gains at 0.8740. In the typically quieter year-end market, the Pound is performing better than the Euro.
The EUR/GBP pair had a brief recovery earlier in the week but faced resistance before reaching 0.8740 and then dropped during the European session. The Euro is currently at 0.8710, just above its two-month low of 0.8705.
Technical Indicators Mixed
On the 4-hour chart, technical indicators are mixed. The Moving Average Convergence Divergence (MACD) shows slight positivity, while the Relative Strength Index (RSI) is at 41, not able to break above 50. Support is found at 0.8707, while resistance sits around the 0.8740 level.
The Euro faces pressure from the lack of big news from the Eurozone, ongoing tensions in Ukraine, and the issues between China and Taiwan. Even though the Euro shows some strength, the overall downtrend continues until it can break through the 0.8740 resistance.
Today, the Euro shows mixed movements against major currencies, performing best against the New Zealand Dollar. It fell by 0.07% against the US Dollar but rose 0.14% against the Pound.
As the EUR/GBP pair approaches the two-month low near the 0.8700 support level, there is a clear bearish sentiment for the Euro. The inability to stay above 0.8740 indicates that sellers are in control during these thin holiday trading conditions. This weakness could present an opportunity for traders looking for further declines.
The Pound’s Relative Strength
The Pound’s strength comes from recent economic data, which appears stronger than that of the Eurozone. For example, UK inflation in November 2025 was 2.9%, slightly below expectations, while the Eurozone’s preliminary December rate stayed high at 3.2%. This difference lessens the need for possible rate cuts from the Bank of England compared to the European Central Bank.
Geopolitical tensions impact the Euro more severely, as the Eurozone is vulnerable to energy markets, especially due to the situation in Ukraine. Recently, European natural gas futures (TTF) rose 6% in two weeks due to stalled negotiations, a situation that poses less risk to the UK economy. This external pressure helps explain why the Euro is struggling.
For traders in derivatives, this scenario suggests buying put options with a strike price below the 0.8700 support level, possibly targeting 0.8670 in the coming weeks. Given that trading volumes typically drop by 35% in the last week of the year, any break of this key support could be sharp. This makes puts a smart choice to take advantage of a potential decline while managing risk.
However, it’s essential to keep an eye on the 0.8740 level as a significant resistance. A clear break above this point would change the current bearish outlook. Traders might consider selling out-of-the-money call options near 0.8775 to generate income, anticipating that the pair’s upside is capped for now.
With technical indicators showing limited momentum, the market may consolidate before making its next big move. Still, the easiest path seems to be downward. Therefore, it’s wise to set up trades that can benefit from gradual declines or quick breaks lower as liquidity returns in early January 2026.
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