Tickmill Expert Blog - Forex Traders Blog

FX Options Insights 5/9/25

Patrick Munnelly — Fri, 05 Sep 2025 16:21:00 +0000

The demand for the USD had initially surged due to risk aversion at the beginning of the week, but signs of this demand began to diminish as traders prepared for the critical U.S. jobs report set to be released on Friday. As a result, traders took action to cover their positions on EUR/USD topside strikes, anticipating movement in the market.This strategic positioning by traders proved to be insightful. When the Non-Farm Payroll (NFP) data was released, it came in significantly weaker than analysts had expected, which triggered a widespread selloff of the USD across various pairs. This reaction highlighted the volatility surrounding the jobs data, with overnight expiry implied volatility already indicating increased risk. It became apparent that the premiums traders paid for protection against market moves were well justified given the unexpected report.Following the release of the jobs data, broader volatility began to decline as the immediate impact of the news was absorbed into the market. However, setbacks in volatility are expected to be temporary for shorter-dated expiries, especially with the upcoming U.S. Consumer Price Index (CPI) report on the horizon. The CPI results are crucial as they will inform the Federal Reserve's decisions regarding future interest rates and potentially serve as another trigger for market volatility.Meanwhile, the GBP/USD pair experienced significant movement over the week, primarily due to concerns regarding UK fiscal policy. These worries further contributed to the decline of the GBP/USD rate and simultaneously elevated related implied volatility. The situation surrounding the UK budget, which has a confirmation date set for November 26, intensified volatility as traders braced for the implications of the fiscal measures.While there has been a recovery in the spot market, affecting the implied volatility for shorter-term expiries, there remains considerable interest among traders in purchasing longer-dated options, particularly those with downside strikes. This indicates a strategic approach to hedge against potential further declines in the GBP or to capitalise on expected movements.In the broader context, implied volatility for expiry periods under three months in most of the major G10 foreign exchange pairings has recently retraced a significant portion of the gains made earlier in the week. However, the longer-dated expiries are either stable or showing higher levels of implied volatility, suggesting that traders are still cautious and anticipating further market movements due to upcoming economic reports and the uncertain fiscal landscape.The hedging of soon-to-expire FX options may strengthen nearby support and resistance levels and may have a pull on FX prices leading up to each day's 10 a.m. New York (1400 GMT) expiration. Thus, it's beneficial to be aware of the location of significant strikes in advance.Day & Date Strike(s) Notional (EUR)Monday Sep 81.1600 2.1 billion1.1620–30 1.2 billion1.1650 437 million1.1700 1.6 billion1.1750 1.6 billion1.1800 1.1 billionTuesday Sep 91.1650 801 million1.1700–05 1 billion1.1750–60 1.5 billionWednesday Sep 101.1600 1.1 billion1.1650 1.5 billion1.1675–80 1.2 billionThursday Sep 111.1635–45 3.8 billion1.1650–55 1.2 billion1.1675–80 1 billion1.1700 875 million1.1740–50 1.5 billion1.1800 1.1 billion1.1825 1.4 billionFriday Sep 121.1550 2.3 billion1.1600 2.3 billion1.1650 1.1 billion1.1670–75 1.5 billion1.1700 2.6 billion1.1725–35 2.2 billion1.1800 1.4 billion

GBPUSD H1 I Price rebounds from 50% Fibonacci support

Desmond Leong — Fri, 05 Sep 2025 10:54:00 +0000

TitleGBPUSD H1 I Price rebounds from 50% Fibonacci supportTypeBullish bouncePreference:The price is falling towards the pivot at 1.3393, a pullback support that aligns with the 50% Fibonacci retracement. A bounce at this level could lead the price toward the 1st resistance at 1.3453, an overlap resistance.Alternative Scenario:If the price breaks below the pivot, it could fall toward the 1st support at 1.3341, a pullback support.

Institutional Insights: Goldman Sachs NFP Scenario Analysis 5/9/25

Patrick Munnelly — Fri, 05 Sep 2025 11:03:00 +0000

Goldman Sachs: NFP Preview From GS Research: We estimate that nonfarm payrolls increased by 60k in August, falling short of the consensus expectation of 75k. - We anticipate the unemployment rate rose slightly to 4.3% (rounded from 4.248% in July), reflecting a gradual easing in other labor market slack indicators. However, this could also include a partial reversal of the surge in new entrant employment that temporarily elevated the unemployment rate in July. - Average hourly earnings are estimated to have grown by 0.3% month-over-month (seasonally adjusted), supported by modestly favorable calendar effectsThoughts from Around GS:Vickie Chang (Global Macro Research): The market faces risks from significant surprises in either direction, making an inline or slightly softer print the most favorable outcome for risk assets. Current market estimates suggest growth is priced at approximately 1.8%, aligning with our 2026 Q4/Q4 forecast but slightly above our near-term projections. Our expectation of +60k job growth and a slight uptick in unemployment to 4.3% would likely fall within a benign range, supporting current growth pricing and reinforcing market expectations for a September rate cut. However, a weaker-than-expected print, such as an unemployment rate of ≥4.4%, could raise recession fears, prompting markets to pull forward cuts and pressuring equities. Conversely, a stronger print or signs of sustained growth could challenge the market's dovish Fed pricing, driving rates higher and weighing on risk assets. With rising equity volatility and skew, short-dated put spreads offer simple downside protection. For rate strategies, US front-end receivers (1m2y) appeal for downside risk, while terminal rate pricing could be vulnerable to stronger data. Ryan Hammond (US Portfolio Strategy): Equity markets appear to be looking past near-term economic weakness, focusing instead on resilient 2026 growth and earnings prospects alongside Fed easing. Market pricing suggests ~2% real US GDP growth, consistent with our 2026 forecast. A jobs report in line with or slightly above consensus could validate this view and lift equity prices modestly, though the upside for the S&P 500 is limited given the optimistic starting point and interplay with Fed policy. The narrow breadth of this year’s equity rally leaves room for low-quality laggards to catch up if macro data is favorable. However, a much weaker-than-expected jobs report could test investors’ ability to look past short-term challenges, likely driving equity prices lower. Shawn Tuteja (ETF/Basket Vol Trading): The setup for this NFP release is murkier than in recent months. With rate cuts imminent, weak data may not trigger a “policy mistake” trade, which could keep equities stable in most scenarios. However, recent sector rotation and client degrossing suggest a more defensive market stance. Key moving averages across major indices and full systematic positioning add further complexity. The consensus range for Friday’s NFP is 50-75k, a range that equities are likely to react favorably to. Extreme outcomes at either tail of the distribution are more concerning, especially given elevated valuations. A very weak print (<15k with no upward revisions) could shift the September meeting’s rate cut odds from ~23 bps to a coin flip between 25 or 50 bps. If the NFP comes in negative with downward revisions, cyclicals vs. defensives (ex-commodities) could be a strong short trade, as this spread is at all-time highs. On the other hand, a very strong print would likely keep the Fed on track for two rate cuts this year. While backend bonds may react negatively, equities could initially respond positively, particularly small caps (RTY), as the steepening curve becomes a medium-term tailwind. However, equities may face challenges from a 10-year yield approaching 5%, a level historically unfavorable for stocks. Joe Clyne (Index Vol Trading): The SPX is trading less than 1% below all-time highs despite recent market gyrations. While the last NFP report shocked the market with weak numbers and revisions, leading to a 1.6% selloff, tomorrow’s straddle is priced at just ~65 bps. A stronger jobs report is expected to elicit a positive market reaction, as growth concerns outweigh uncertainty over year-end rate cuts. With skew near highs and volatility off lows, October SPX put spreads are an optimal hedge for a soft jobs number. For example, the October 5700/6300 put spread (ref 6463f) looks attractive at $50 with a 12:1 payout, buying vol in the 15s and selling in the mid-20s. On the upside, options are less compelling as volatility is expected to retrace lower during a rally, but the October 6600/6750 call 1x2 at $24 is a good trade for a gradual equity grind higher, offering long delta and short vol at inception. NDX vol spreads are elevated relative to SPX, so we recommend concentrating long optionality in SPX. Meanwhile, the Russell 2000 (RUT) has been highly responsive to data surprises, making IWM topside exposure appealing despite stretched vol spreads to SPX.

Daily Market Outlook, September 5, 2025

Patrick Munnelly — Fri, 05 Sep 2025 09:46:00 +0000

Daily Market Outlook, September 5, 2025 Patrick Munnelly, Partner: Market Strategy, Tickmill GroupMunnelly’s Macro Minute…A surge in Wall Street stocks extended into Asia, supported by further signs of a cooling labour market that heightened expectations for a Federal Reserve interest rate cut this month. Asian stock markets gained, with mainland China's markets bouncing back after a decline on Thursday. Futures for the S&P 500 rose as the index achieved a new all-time high. Contracts also suggested a positive opening for European markets. Japanese shares climbed following Trump's issuance of an executive order to formalise his trade agreement with Japan. Treasuries remained stable after the prior day’s increase, with the sensitive US two-year yield hovering close to a one-year low. Money markets are almost entirely pricing in a Fed rate cut, with at least two cuts projected by the year's end. The Dollar weakened against its Group-of-10 peers, while gold prices increased. In other developments, Trump announced an executive order to implement his trade deal with Japan, which includes a maximum 15% tariff on most imports from the US. This agreement, reached in July and featuring a commitment from Japan to create a $550 billion US investment fund, had yet to be finalised as negotiations continued between Washington and Tokyo. Oil prices dropped for a third consecutive day, heading for a weeklong decline ahead of an OPEC+ meeting that may approve another increase in supply.US labour market data has shown consistent weakness throughout the summer. Downward revisions to the most recent payrolls report align with weaker JOLTS figures earlier this week, alongside slowing ADP numbers (+54k in August), rising Challenger job cuts, and softer survey data. The ISM reports also indicate declining headcounts across manufacturing and services sectors. Expectations are that this slowdown will be reflected in the August non-farm payroll data, with a median forecast of 75k jobs added month-over-month, slightly above the initially reported 73k for July. Markets remain sensitive to potential further downward revisions, especially with the first estimate of the annual revision set for release next Tuesday.Although some analysts suggest that this slower pace of payroll growth is near the breakeven rate needed to maintain stable unemployment—partly due to reduced labour supply from lower immigration—the unemployment rate is still projected to rise by 0.1 percentage points to 4.3%. Traders will also monitor the participation rate, which recently fell to 62.2%, its lowest level since October 2022 when the market was recovering from the pandemic. Any further decline could heighten concerns within the Federal Reserve that the labour market is transitioning from equilibrium to excessive slack.The week ahead promises heightened activity in financial markets, driven by key events across regions. In France, Monday's confidence vote in the government could set the tone for market dynamics early in the week. Meanwhile, Fitch’s sovereign rating review, scheduled for Friday, will likely attract significant attention. On Wednesday, EU President Von der Leyen’s State of the Union address may touch on recent political and economic developments, potentially influencing discussions during Thursday’s ECB Governing Council meeting press conference. While no changes to policy rates are expected, revisions to staff macroeconomic projections are anticipated to be minimal. Additionally, several key indicators from EU member states will be released, including German trade and industrial production figures on Monday and final August CPI prints on Friday.In the U.S., focus will centre on inflation data, with PPI due Wednesday and CPI on Thursday. Before that, Tuesday's annual benchmark revisions to payroll employment could prove pivotal, particularly if weaker lower-frequency surveys pull down higher-frequency estimates of firm births and deaths. This might solidify expectations for a Fed rate cut. In the UK, Friday’s release of July’s monthly GDP estimate will provide an initial snapshot of Q3 growth, helping to assess whether it aligns with the Bank of England’s forecast of 0.3% quarter-on-quarter expansion.Overnight HeadlinesTrump Signs Order Cementing Japan Tariff Deal With 15% RateBroadcom Gives Upbeat Forecast In Sign AI Demand Remains StrongLululemon Falls On Slashed Outlook As Sales Rut PersistsXi Unites World Leaders Sick Of Being Pushed Around By TrumpUS And Taiwanese Defence Officials Held Secret Talks In AlaskaFed’s Williams Sees Gradual Cuts; Lets Data Drive When They HappenFed's Goolsbee: Labour Market Might Be DeterioratingJapan’s Wages Gain Most In Seven Months, Backing Rate Hike CaseMarkets Brace For Volatility Amid Trump’s Fed ManeuversNvidia Boosts Lambda With $1.5B Deal To Rent Its Own AI ChipsIntel Says 2026 Will Be Pivotal Year For Its Manufacturing TechSmaller Banks Tackle $395B Bond Headache With Share SalesAnthropic To Stop Services To Majority Chinese-Owned GroupsFX Options Expiries For 10am New York Cut (1BLN+ represents larger expiries, more magnetic when trading within daily ATR)EUR/USD: 1.1600 (EU2.64 billion), 1.1550 (EU1.69 billion), 1.1800 (EU1.27 billion) USD/JPY: 146.00 ($2.36 billion), 147.00 ($1.12 billion), 144.45 ($766.1 million) AUD/USD: 0.6400 (AUD1.12 billion), 0.6500 (AUD1.09 billion), 0.6600 (AUD1.02 billion) USD/CAD: 1.3860 ($743.8 million), 1.3850 ($556 million), 1.3730 ($495 million) USD/BRL: 5.3000 ($560 million), 5.4000 ($390 million)CFTC Positions as of the Week Ending August 29 Speculators have reduced their net short position in CBOT US Treasury bonds futures by 15,030 contracts, bringing the total to 36,013. They have also increased their net short position in CBOT US Ultrabond Treasury futures by 6,783 contracts, resulting in a total of 248,945. Speculators have cut their net short position in CBOT US 10-year Treasury futures by 61,687 contracts, now totaling 883,829. The net short position in CBOT US 5-year Treasury futures has been trimmed by 44,412 contracts, down to 2,463,971. Meanwhile, the net short position in CBOT US 2-year Treasury futures decreased by 61,457 contracts to 1,263,082. Equity fund managers have boosted their net long position in S&P 500 CME by 3,284 contracts, leading to a total of 867,359. In contrast, equity fund speculators have increased their net short position in S&P 500 CME by 62,459 contracts, now totaling 428,262. The net long position in Japanese yen stands at 84,484 contracts, while the euro net long position is at 123,039 contracts. The British pound has a net short position of -31,353 contracts, and the Swiss franc shows a net short position of -26,978 contracts. Lastly, Bitcoin holds a net short position of -372 contracts..Technical & Trade ViewsSP500Daily VWAP BullishWeekly VWAP BullishAbove 6440 Target 6600Below 6420 Target 6370EURUSD Daily VWAP Bearish Weekly VWAP BullishBelow 1.1750 Target 1.15Above 1.18 Target 1.1910GBPUSD Daily VWAP Bearish Weekly VWAP BullishBelow 1.36 Target 1.30Above 1.3650 Target 1.3850USDJPY Daily VWAP Bullish Weekly VWAP BearishBelow 1.49 Target 1.45Above 1.51 Target 1.54XAUUSDDaily VWAP Bullish Weekly VWAP BullishAbove 3450 Target 3600Below 3300 Target 3260BTCUSD Daily VWAP Bullish Weekly VWAP BearishAbove 110k Target 118kBelow 109k Target 105k

USDCAD H1 I Bearish reversal for the Loonie

Desmond Leong — Fri, 05 Sep 2025 10:51:00 +0000

TitleUSDCAD H1 I Bearish reversal for the LoonieTypeBearish reversalPreference:The price is reacting off the pivot at 1.3831, which is a pullback resistance.. A reversal from this level could lead the price toward the 1st support at 1.3787, a pullback support that aligns with the 50% Fibonacci retracement.Alternative Scenario:If the price breaks above the pivot, it could rise to the 1st resistance at 1.3857, which is an overlap resistance.

USOUSD H1 | Downtrend momentum likely to continue

Desmond Leong — Fri, 05 Sep 2025 10:56:00 +0000

TitleUSOUSD H1 | Downtrend momentum likely to continueType Bearish dropPreference:The price is rising towards the pivot at 64.14, which is a pullback resistance. A reversal from this level could lead the price toward the 1st support at 62.58, a pullback support..Alternative Scenario:If the price breaks above the pivot, it could rise to the 1st resistance at 64.98, which is a pullback resistance that is slightly below the 61.8% Fibonacci retracement.

SP500 LDN TRADING UPDATE 5/9/25

Patrick Munnelly — Fri, 05 Sep 2025 08:53:00 +0000

SP500 LDN TRADING UPDATE 5/9/25WEEKLY & DAILY LEVELS***QUOTING ES1! CASH US500 EQUIVALENT LEVELS SUBTRACT ~10 POINTS***WEEKLY BULL BEAR ZONE 6420/10WEEKLY RANGE RES 6554 SUP 6392DAILY BULL BEAR ZONE 6510/00DAILY RANGE RES 6572 SUP 64522 SIGMA RES 6633 SUP 6392VIX DAILY BULL BEAR ZONE 17SEP MOPEX STRADDLE 186.6 POINTS - 6260/6639SEP EOM STRADDLE 178 POINTS - 6282/6638DAILY MARKET CONDITION - ONE TIME FRAMING UP 6456One-Time Framing Up (OTFU): This represents a market trend where each successive bar forms a higher low, signaling a strong and consistent upward movement.TRADES & TARGETSLONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY RANGE RESSHORT ON TEST/REJECT OF WEEKLY RANGE RES TARGET DAILY BULL BEAR ZONE(I FADE TESTS OF 2 SIGMA LEVELS ESPECIALLY INTO THE FINAL HOUR OF THE NY CASH SESSION AS 90% OF THE TIME WHEN TESTED THE MARKET WILL CLOSE AT OR BELOW THESE LEVELS)GOLDMAN SACHS TRADING DESK VIEWSS&P closed up +83bps at 6,502, supported by a Market-on-Close (MOC) buy imbalance of $3.3bn. The NDX gained +93bps to finish at 23,633, the R2K climbed +109bps to 2,375, and the Dow rose +77bps to 45,621. Trading volume reached 14.5bn shares across all U.S. equity exchanges, slightly below the year-to-date daily average of 16.8bn shares. The VIX dropped -599bps to 15.38, crude oil slid -103bps to $63.32, the U.S. 10-year Treasury yield declined -5bps to 4.16%, gold dipped -26bps to 3,550, the DXY strengthened +14bps to 98.28, and Bitcoin fell -188bps to $110k.Post-Labor Day trading activity continues to pick up across desks, driven by a busy sell-side conference schedule. The GS Retail Conference concluded today, while the GS Communacopia kicks off next week alongside other key events, including Barclays Staples, Citi TMT, Wells Fargo Healthcare, MS Industrials, and UBS Materials conferences. Feedback from day two indicates constructive sentiment, with retail flows skewed toward buying in the afternoon, while Staples saw more selling as challenges persist in that sector.Yields remain a focal point after earlier volatility, with the 10-year yield settling below 4.20% by the close. Momentum was positive, with the HF VIP vs. Most Short (GSPRHVMS Index) ending +145bps. In tech, notable earnings reports included AVGO, BRZE, DOCU, GWRE, IOT, PATH, and TTAN, with AVGO in the spotlight. AVGO reported "okay" AI revenues for the quarter at $5.2bn, slightly above its $5.1bn guidance (and up from $4.4bn last quarter). The company guided for AI semiconductor revenue growth to accelerate to $6.2bn in Q4. AVGO traded flat post-earnings. Meanwhile, DOCU gained +6.5% (off earlier highs of +10%) following a beat-and-raise quarter. Broader software names like ADBE, NOW, MNDY, HUBS, and SNOW continue to de-rate, with little new information from last night’s reports, leaving bearish SaaS narratives intact.Flows: Overall activity was rated a 5 out of 10 today. Our trading floor ended +397bps better to buy, with demand from both long-only (LO) investors and hedge funds (HFs). HF flows were skewed 5% toward buying, driven by interest in consumer discretionary, macro products, and financials. LO flows were even more bullish, with a +14% buy skew, led by demand in macro products, communication services, and information technology.GS Research on Nonfarm Payrolls (NFP): - We estimate that nonfarm payrolls increased by 60k in August, below the consensus estimate of 75k.- The unemployment rate likely edged up to 4.3% (rounded) from 4.248% in July, reflecting easing labor market slack and potential payback from the reversal of July’s spike in new entrant employment.- Average hourly earnings are estimated to have risen by 0.3% month-over-month (seasonally adjusted), supported by slightly positive calendar effects.The VIX has returned to a 15 handle as SPX futures once again surpassed 6500. The skew has notably flattened across the surface during this breakout. We are observing continued hedging activity through SPY/IWM downside positions. Interest in the financial sector is increasing, as seen by two-way flows in XLF; for instance, yesterday there was a buyer of XLF put spreads, and today we noted an upside buyer of XLF calls with a short expiration.The straddle for tomorrow's NFP release was priced at about 0.60%, and we perceive the potential outcomes for volatility as quite bimodal. A rally back to previous highs should result in implied volatility declining again, as we would re-enter a period of dealer gamma, while a selloff might trigger responsive volatility if we test the lows from earlier this week.For those who are apprehensive about the forthcoming weeks or months, the desk suggests considering HYG puts or put spreads as an economical hedge. HYG options are still exhibiting historically low implied volatilities, with the 3-month 25-delta put implied vol at the 13th and 9th percentiles for the last 5 and 10 years, respectively.

NZDUSD H1 I Bearish reversal at pullback resistance

Desmond Leong — Fri, 05 Sep 2025 11:01:00 +0000

TitleNZDUSD H1 I Bearish reversal at pullback resistanceTypeBearish reversalPreference:The price is rising towards the pivot at 0.5852, a pullback resistance that aligns with the 38.2% Fibonacci retracement. A reversal at this level could lead the price toward the 1st support at 0.5821, a swing low support that aligns with the 127.2% Fibonacci extension.Alternative Scenario:If the price breaks above the pivot, it could rise toward the 1st resistance at 0.5880, a pullback resistance.

FTSE 100 FINISH LINE 4/9/25

Patrick Munnelly — Thu, 04 Sep 2025 16:36:00 +0000

FTSE 100 FINISH LINEUK stocks saw a slight increase on Thursday, driven by advancements in consumer staples and utility shares, as investors evaluated corporate reports. Miners of precious metals declined as they mirrored the drop in gold prices, with Fresnillo down by 1.6%. Meanwhile, bond markets displayed some stability after a prior sell-off this week prompted by worries over Britain's financial situation and the government's capacity to manage it, which pushed yields on 30-year British government bonds, or gilts, to their peak since 1998. Nevertheless, investors remain wary of potential tax increases that might hinder economic growth, especially with Britain set to present its budget on November 26. In terms of economic data, activity in Britain's construction industry decreased for the eighth consecutive month in August, marking its most extended slump since 2020. A Bank of England survey indicated that British companies noted a slight increase in their inflation expectations for the coming year. Investors are now looking forward to the retail sales data for July, scheduled for release on Friday.Major bank stocks also increased, with Lloyds seeing a 1.2% rise. Reports indicate that the bank is contemplating the potential termination of around 3,000 employees deemed to be within the lowest 5%.Shares of Genus rise 28.8% to 3220p, among top gainers in the FTSE mid 250 index. The company is accelerating its strategic collaboration with Beijing Capital Agribusiness, receiving a $160 million payment. Genus reports an annual adjusted profit before tax of £74.3 million, a 38% increase. Peel Hunt notes strong cash performance and encouraging outlook from the China joint venture. The stock is up 77.1% YTD, compared to a 3.7% rise in the FTSE mid-cap index.Shares of British motor retail company Vertu Motors increased by 1.9% to 60.1 pence. The company reports stable volume and margin levels for like-for-like used car sales, alongside significant growth in its aftersales sector over the five months ending July 31. They indicated that the new retail order book for September is slightly ahead of last year's figures. The company anticipates an adjusted pretax profit for FY26 to be in line with market expectations of between 26.5 million and 27.5 million pounds ($35.80 million - $37.15 million), as per a consensus compiled by the company. Year-to-date, VTU is down 0.14%.Technical & Trade ViewFTSE Bias: Bullish Above Bearish below 9000Primary support 9000Below 8900 opens 8600Primary objective 9600Daily VWAP BullishWeekly VWAP Bullish

EURUSD H1 I Bullish reversal at major support

Desmond Leong — Thu, 04 Sep 2025 11:11:00 +0000

TitleEURUSD H1 I Bullish reversal at major supportTypeBullish bouncePreference:The price is falling towards the pivot at 1.1655, which is an overlap support that aligns with the 38.2% Fibonacci retracement. A bounce from this level could lead the price toward the 1st resistance at 1.1704, a pullback resistance.Alternative Scenario:If the price breaks below the pivot, it could fall to the 1st support at 1.1617, which is a pullback support.