Insights 
VT 
The latest data indicates that the Australian Commodity Futures Trading Commission recorded AUD net positions at -78.1k compared to the previous -81.3k. This change in figures provides a slight improvement in the positions.
In other currency news, the EUR/USD pair saw an increase, trading above 1.1550, aided by poor US employment and ISM Manufacturing PMI data. Similarly, GBP/USD rose above 1.3250 after reverse momentum following disappointing US job figures.
Gold Price Movement
Gold reached weekly highs at around $3,350 as US Treasury bond yields fell, influencing the reassessment of the Federal Reserve’s interest rate strategy. The effect of this was apparent in the increased value of XAU/USD.
Meanwhile, the cryptocurrency market faced challenges despite buoyancy in July. Bitcoin dropped under $115,000, with sellers anticipating support at $112,000 due to heightened liquidation levels.
The euro area economy maintains steadiness, backed by the EU-US agreement and Germany’s spending acceleration. While risks remain for a potential interest cut later, there’s an emphasis on monitoring wage development.
Trading Strategy
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Based on the weak US jobs data, we see the dollar weakening as the primary trend to follow in the coming weeks. The July 2025 Non-Farm Payrolls report, released yesterday, showed only 95,000 jobs were added against an expectation of 180,000, which confirms this view. This makes long positions on pairs like EUR/USD and GBP/USD attractive.
Given this clear momentum, we should consider buying near-term call options on the EUR/USD, especially as it pushes past the 1.1550 level. The US ISM Manufacturing PMI also dropped into contraction territory at 48.5, which suggests this dollar weakness could persist through August. This strategy allows for defined risk while playing the current trend.
Gold’s rally to $3,350 is directly tied to falling US Treasury yields and the market reassessing the Federal Reserve’s plans. Looking at historical data from the CME FedWatch Tool, the probability of a Fed rate cut by December 2025 has jumped from 25% a month ago to over 60% following yesterday’s data. We can expect call options on gold futures to remain in high demand.
For the Australian dollar, the slight improvement in net short positions is not a strong buy signal. The overall position is still extremely bearish at -78.1k, likely reflecting concerns over China’s economy after their July Caixin PMI barely held expansion at 50.1. Selling out-of-the-money call options on the AUD could be a way to collect premium while respecting the overwhelmingly negative sentiment.
The crypto market is moving differently, with Bitcoin showing weakness by dropping below $115,000. Recent data from Coinglass showed over $400 million in long position liquidations in a single 24-hour period last week, signaling widespread selling pressure. We should watch the $112,000 support level closely and consider protective puts if it breaks.
