Insights 
VT 
The European Central Bank (ECB) has maintained the rate on its deposit facility at 2%, which was in line with forecasts. This decision reflects steady economic conditions in the eurozone.
In currency markets, the EUR/USD pair remains around the 1.1560 level. Meanwhile, the GBP/USD is experiencing pressure and is directed towards the 1.3100 threshold.
Gold Prices And Crypto Recovery
Gold prices are rising, moving above the $4,000 mark, despite a strong US Dollar. In the crypto market, there is a recovery as trade tensions between the US and China ease after a meeting between Trump and Xi.
Zcash is continuing its upward trend, aiming for the $400 level.
With the European Central Bank holding its deposit rate at 2%, the policy difference between Europe and the United States remains significant. The US Federal Reserve’s current rate of 4.5% creates a substantial yield advantage for the dollar, which explains the continued pressure on the EUR/USD pair. We believe traders should consider strategies that benefit from a stagnant or weaker euro, such as selling out-of-the-money call options on EUR/USD futures.
The easing of trade tensions between the US and China has calmed market-wide volatility, which we can see reflected in the VIX index dropping from above 25 to its current level of 18 over the past month. This environment suggests that selling volatility could be a prudent move. We are looking at implementing strategies like iron condors on major stock indices, which profit from a lack of large price swings in either direction.
Gold And Sterling Movements
Gold’s push above $4,000 an ounce is a historic milestone, representing a near-doubling in price since the inflationary pressures we saw starting back in 2023. This momentum, combined with a recent cooling in US CPI to 3.8%, has put some temporary weakness into the US Dollar Index, fueling gold’s ascent. We see an opportunity to purchase long-dated call options to participate in further upside while defining our risk.
Sterling’s weakness is being compounded by fresh UK economic data showing GDP growth came in at just 0.1% last quarter, confirming a period of economic stagnation. This makes the GBP/USD pair particularly vulnerable, especially with its target of 1.3100 in sight. We find that buying near-term put options on the pound offers a direct way to position for further declines.
The rebound in the crypto market is a clear sign of renewed risk appetite following the positive trade news. This broad market optimism is lifting speculative assets like Zcash, which is likely to experience heightened volatility as new capital flows in. We believe setting up long straddles could be an effective way to capitalize on a significant price move, regardless of the direction.
