Silver (XAG/USD) rose by over 0.50% on Friday after rebounding from a daily low of $73.95. Reports of possible renewed talks between Washington and Tehran coincided with gains in US equities and precious metals, with XAG/USD at $75.83 at the time of writing.

Price action suggests consolidation near the 20-day and 100-day Simple Moving Averages, both at $75.64. Since the March 23 low near $61.02, silver has posted higher lows, while the latest rise topped around $83.05 before pulling back towards $75.00.

Momentum indicators point to downside risk, with the Relative Strength Index described as bearish. For continuation lower, price would need to break $75.00, then the April 13 low of $72.61, followed by the April 7 low of $69.82.

If price rises, it would need to move back above the 100-day SMA and then the 50-day SMA at $78.57. Above that area, the next level noted is $80.00.

Looking back at the analysis from 2025, we can see the market was coiled for a move while consolidating around the $75 level. The pattern of higher lows was the key signal, correctly pointing toward an eventual uptrend that broke through the $83 resistance later that year. That period of indecision ultimately resolved to the upside.

The fundamental picture has become much clearer since then, strongly supporting higher prices in the weeks ahead. We’ve seen industrial demand for silver surge, with recent data from the International Energy Agency showing a 15% year-over-year increase in solar panel installations for the first quarter of 2026. The Silver Institute’s new 2026 report also confirms a fourth consecutive year of a significant supply deficit, creating a solid floor under the market.

Monetary policy is also providing a tailwind, as the Federal Reserve has signaled a pause in rate hikes due to inflation cooling to 2.8% in the latest report. This environment weakens the US dollar and makes non-yielding assets like silver more attractive for investment. The market is now pricing in a potential rate cut by the third quarter, which should fuel the next leg up.

Given this bullish backdrop, we see an opportunity in buying call options to capitalize on the expected upward momentum. Traders should consider purchasing June or July 2026 call options with a strike price around $88, just above the current trading range. This strategy offers leveraged exposure to a potential move towards the psychological $90 level and beyond.

To manage risk, we should watch the old 2025 peak of $83, which now serves as a major support level. A decisive break below this price would signal a change in trend, making protective put options with an $82 strike a prudent hedge. This protects capital if the expected breakout fails to materialize and the market reverses course.

Bangko Sentral ng Pilipinas raised its policy rate by 25 basis points to 4.5% at the 23 April MPC meeting. It said further rises are possible as inflation forecasts are revised higher and second-round effects develop.

The Board flagged a higher risk of inflation expectations becoming de-anchored. It cited higher oil and fertiliser prices feeding into domestic fuel and food costs, while core inflation continues to edge up.

Governor Remolona said that once rate rises begin, another increase is likely, and that a 50bp move was discussed. The 25bp rise was described as measured, with the Board stating it would still accommodate economic recovery over the medium term.

The peso may find some support from the move, as it reduces the chance that policy lags inflation. The currency remains exposed to imported energy shocks and uncertainty around US–Iran ceasefire dynamics.

Technical levels cited were resistance at 60.83 and support at 60.15 (21 DMA) and 60, including 23.6% fibo retracement of the 2026 low to high. The article notes it was produced using an AI tool and reviewed by an editor.

We see the Bangko Sentral ng Pilipinas’ rate hike to 4.5% as a necessary step against rising inflation, which hit 5.1% in March. This move helps reduce the risk of the central bank falling behind the curve. For now, it provides some relative support for the peso.

However, the hawkish central bank is fighting a difficult battle against external pressures. With Brent crude futures trading near $105 a barrel due to ongoing US-Iran ceasefire uncertainties, the Philippines’ reliance on imports for over 90% of its oil needs puts severe pressure on the currency. This makes any strength in the Philippine Peso fragile.

We remember from our 2025 perspective how the peso weakened significantly during the energy price shock of 2022. That historical precedent suggests that geopolitical headlines can easily overpower domestic monetary policy. This makes us cautious about buying the peso outright despite the higher interest rates.

Given this tug-of-war, we are looking at options to manage risk over the next few weeks. Buying USD/PHP call options offers a way to profit if the peso weakens further towards that 60.83 resistance level. This strategy limits our downside if a sudden ceasefire deal strengthens the peso.

We are closely watching the 60.83 level in USD/PHP as a key resistance point and a potential target for long positions. On the other hand, a drop below the 60.15 support could signal that the BSP’s actions are gaining traction. Any break of these levels will likely guide our short-term derivative positioning.

TD Securities strategists expect the Bank of Canada to keep the Overnight Rate at 2.25% through the April meeting and likely for the rest of 2026. They expect a more balanced but still cautious message.

They expect higher energy prices to lift the Bank’s inflation forecast in the April Monetary Policy Report. They expect smaller changes to core inflation and GDP forecasts, with the Bank looking past short-term inflation jumps.

They expect the Bank to describe growth risks as two-sided, linked to higher oil prices and the Hormuz Strait closure. They also expect the Bank to focus on risks tied to ongoing USMCA renegotiation.

They cite a downside surprise in recent CPI as support for holding rates. Market pricing shows December at 2.61%, and they expect a move back to pre-war levels to be gradual.

The article was produced with the help of an Artificial Intelligence tool and reviewed by an editor.

The Bank of Canada is likely to keep rates at 2.25% for the rest of 2026, despite what the market is pricing. We see the current market expectation for a rate of 2.61% by December as overdone, influenced more by moves in US markets than a true shift in Canadian policy. This suggests an opportunity to position against future rate hike expectations.

The central bank can afford this patient stance, especially after last week’s March 2026 inflation data came in at 2.1%, well below the 2.4% consensus forecast. While higher energy prices from the Hormuz Strait closure will temporarily boost headline inflation, the Bank of Canada is expected to look past this spike. This reinforces the view that the bar for a rate hike is significantly high.

The recent jump in WTI crude to around $95/barrel presents a two-sided risk that supports the Bank’s cautious approach. While higher prices benefit Canada’s energy sector, they also act as a tax on global consumers, which could slow demand for our other exports. This balance means the Bank of Canada won’t rush to hike rates based on the oil shock alone.

Adding to the uncertainty are the ongoing USMCA renegotiations, with recent comments from Washington stalling progress and weighing on the business outlook. This is a very different environment from late 2025, when the market was pricing in rate cuts amid mild recession fears. The current stability is welcome, but these external risks will keep the Bank on the sidelines.

For derivative traders, this outlook suggests that paying fixed on Canadian overnight index swaps for the December 2026 tenor is unattractive. We believe going long instruments like the December BAX futures contract offers value, as it would profit if the market reprices to a flatter, no-hike path. These positions are a direct play on the idea that current market pricing is too aggressive.

US Commodity Futures Trading Commission data shows net positions in oil for non-commercial traders fell to 192.3K.

This was down from 206.5K in the prior report.

Speculative Positioning Shifts

We are seeing large speculators and hedge funds back away from their bullish oil bets, as net long positions have been cut to 192.3K. This suggests the smart money is becoming less confident that prices will continue to rise in the near term. This shift in sentiment should put us on alert for a potential price correction.

This change aligns with recent economic data, as China’s manufacturing PMI for March unexpectedly dipped to 49.8, signaling a slight contraction. We are concerned this points to weakening energy demand from a key global consumer. A slowdown there has historically put a cap on crude oil rallies.

On the supply side, the latest EIA report showed a surprise build in U.S. crude inventories of over 3 million barrels, against forecasts for a draw. This indicates the market might be better supplied than previously assumed. This combination of weakening demand signals and rising stockpiles justifies the cautious positioning from funds.

Looking back at the volatility in 2025, we learned that these shifts can precede choppy, range-bound markets. Therefore, traders could consider selling out-of-the-money call spreads to collect premium, betting that prices will struggle to break recent highs. This is a less aggressive strategy than outright shorting the market.

Options Based Trade Ideas

For those expecting a sharper decline, buying put options offers a defined-risk way to position for a downturn. We see this as a prudent way to capitalize on the waning bullish momentum. A break below the 50-day moving average would be a key technical signal that could accelerate selling pressure.

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CFTC data for the eurozone show EUR non-commercial net positions at 41.3K. This is up from 26K in the previous report.

We are seeing a significant increase in bullish sentiment for the Euro, with speculative net long positions jumping to €41.3 billion from €26 billion. This is a strong signal that large traders are positioning for the Euro to appreciate in the coming weeks. This is the largest weekly increase in net long positions we have seen in over six months.

This shift likely reflects the divergence in central bank policy that is becoming more apparent. Recent Eurozone inflation data came in slightly above expectations at 2.7%, fueling beliefs that the European Central Bank will delay any potential rate cuts until later this year. Meanwhile, the latest US jobs report showed a modest cooling, which keeps a potential summer rate cut from the Federal Reserve on the table.

Looking back, we remember the market sentiment in late 2025 when similar economic data divergences began to appear. That period was followed by a sustained rally in the EUR/USD exchange rate from 1.05 to 1.09 over the following quarter. The current build-up in speculative longs suggests the market may be positioning for a repeat of that performance.

For traders, this points towards establishing long Euro positions through derivatives. Buying EUR/USD call options with June and July 2026 expiries provides a defined-risk way to capitalize on a potential upward move towards the 1.10 level. The current low implied volatility makes option premiums relatively inexpensive.

It is also wise to monitor the volatility markets for signs of a breakout. The Euro Stoxx 50 Volatility Index (VSTOXX) has been trading near its historical lows, suggesting complacency in the market. An increase in speculative positioning like this often precedes a pickup in volatility, which could present opportunities for traders using straddles or strangles.

Japan CFTC data shows non-commercial net positions in JPY moved further into negative territory.

The net position fell to ¥-94.5K from ¥-83.2K in the previous report.

We see that speculative net short positions against the Japanese yen have deepened, reaching their most bearish level in months. This indicates a strong conviction among traders that the yen is poised for further weakness. The momentum is clearly favoring a higher USD/JPY exchange rate.

The primary driver for this sentiment remains the stark interest rate differential between the United States and Japan. Recent U.S. inflation data, with core CPI hovering around 3.2%, suggests the Federal Reserve will maintain its restrictive stance, while the Bank of Japan has signaled only a very gradual path away from its ultra-loose policy. This policy divergence continues to fuel the popular carry trade.

For derivative traders, this suggests maintaining a bullish outlook on USD/JPY. We believe buying call options on USD/JPY or implementing bull call spreads offers a defined-risk way to capitalize on expected yen depreciation. These positions would profit as the dollar continues to strengthen against the yen in the coming weeks.

However, we must note that this level of short positioning is becoming extreme, reminiscent of the conditions we saw back in early 2024. That period saw speculative shorts reach a 17-year high before Japanese authorities stepped in to support their currency when USD/JPY crossed the 160 level. With the pair now approaching similar territory, the risk of intervention is rising significantly.

Given the crowded nature of this trade, a sudden reversal could be violent. We advise traders to consider hedging their short yen exposure by purchasing some out-of-the-money USD/JPY put options. This strategy would provide protection against a sharp yen rally triggered by surprise intervention or a sudden shift in BoJ policy.

UK CFTC data shows GBP non-commercial net positions increased to -£52K from -£54.7K.

The move indicates a smaller net short position in sterling compared with the previous report.

Sterling Positioning Turns Less Negative

We are seeing a slight reduction in net short positions on the British Pound, moving from -£54.7K to -£52K. This suggests some of the most pessimistic traders are closing their bets against sterling. However, the overall market sentiment remains clearly bearish, not bullish.

This cautious shift likely reflects recent data showing UK inflation for March 2026 cooled to 2.8%, moving closer to the Bank of England’s target. While preliminary Q1 GDP growth was a sluggish 0.2%, it did avert a recession, removing a key tail risk for now. This mixed but slightly improved picture is prompting a re-evaluation of the most extreme short GBP positions.

The key question remains the timing of the Bank of England’s first rate cut, which markets are now pricing for the third quarter. Recent meeting minutes showed a growing dovish sentiment within the committee, with more members favouring a cut. This contrasts with the US Federal Reserve, which continues to signal a “higher for longer” stance, capping any significant rally in GBP/USD.

We remember the significant sterling volatility throughout 2025 following the new government’s first budget, and traders are still wary of being caught short. Given the reduced pessimism but lack of a clear bullish catalyst, selling out-of-the-money options to collect premium could be a prudent strategy. This approach capitalizes on the idea that sterling may trade within a range while we await a definitive policy move from the Bank.

Options Strategy Focuses On Range Trading

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US CFTC data shows non-commercial net positions in gold at 164K. The previous reading was 162.5K.

This is an increase of 1.5K net positions from the prior report. The figures refer to futures and options positioning reported by the CFTC.

The latest figures show large speculators slightly increased their bullish bets on gold. This is not a massive shift, but it confirms the underlying positive sentiment we have seen building among hedge funds. It tells us that despite a quiet market, big players are not backing away from their long positions.

This positioning reflects a broader economic narrative that is becoming clearer. We saw March Consumer Price Index data cool to 3.1%, a welcome decline from the stubborn 3.8% figures we wrestled with at the end of 2025. This has led the futures market to price in a 60% probability of a Federal Reserve rate cut by the third quarter, making gold more attractive.

We also have to consider the strong fundamental support coming from official channels. New data from the World Gold Council shows central banks continued their aggressive buying, adding another 250 tonnes in the first quarter of this year, building on the record pace set in 2025. This institutional demand creates a solid price floor and absorbs a significant amount of market supply.

For traders, this suggests a strategy of buying call options with expiries for late this year might be sensible. This approach allows participation in a potential rally driven by a Fed policy shift, while defining the risk if gold remains range-bound for a few more months. Selling out-of-the-money puts could also be a viable strategy to generate income, banking on the idea that strong central bank demand will prevent any severe price drops.

US CFTC data shows S&P 500 NC net positions rose to -110.1K.

The prior reading was -115.8K.

Speculative Shorts Are Being Reduced

We are seeing that large speculators are reducing their bets against the S&P 500. This means the bearish sentiment that has dominated the market is starting to ease. This is not yet a bullish signal, but it is a clear sign that conviction on the short side is fading.

This shift in positioning comes as recent economic data for March 2026 showed core inflation moderating to a 3.2% annual rate, easing fears of more aggressive central bank action. We’ve seen Treasury yields pull back from their recent highs in response, with the 10-year note now trading below 4.5%. This provides some relief for equity valuations which were under pressure throughout the first quarter.

As we are in the middle of Q1 2026 earnings season, results are coming in better than initially feared, particularly from large-cap technology firms. With nearly 60% of S&P 500 companies having reported, the blended earnings growth rate is tracking at a positive 3.5%, beating expectations. Strong corporate performance provides a fundamental reason for traders to close out their short positions.

From a derivatives perspective, this may put downward pressure on implied volatility. We’ve watched the VIX index fall from above 20 in March to around 17.5 recently, making long-volatility positions less attractive. Traders might consider selling out-of-the-money puts on market dips to collect premium, capitalizing on this potential stability.

Looking back, we saw a similar dynamic in the second quarter of 2023 when speculative net shorts were covered as recession fears abated, which preceded a strong market rally into the summer. Therefore, we should monitor if this trend of shrinking short positions continues in the coming weeks.

What To Watch Next

A move toward a flat or net long position would be a much stronger signal that a durable market bottom may be forming.

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Australia’s CFTC AUD NC net positions were 64.8K in the latest report. The previous figure was 65.1K.

This shows a decrease of 0.3K from the prior period. The data refers to non-commercial net positioning in the Australian dollar.

The latest positioning data shows that large speculators are slightly trimming their bullish bets on the Australian dollar. This isn’t a major reversal but suggests conviction is taking a breather after a strong run. We are seeing some profit-taking as the market waits for a new catalyst.

This hesitation makes sense when we look at the RBA’s stance through 2025, when they held rates high to fight inflation. Now, with the latest Q1 2026 inflation report showing the annual rate has eased to 3.2%, markets are starting to price in the possibility of a rate cut before the end of the year. This potential shift is capping the Aussie dollar’s upside for now.

We must also consider the slowdown in commodity prices, a key driver for the currency. Iron ore, for instance, has fallen over 15% from its peaks in late 2025, now trading around $115 per tonne due to softer industrial data out of China. This external pressure creates a significant headwind against further Aussie dollar appreciation.

Meanwhile, the US dollar remains firm, with the latest Non-Farm Payroll report from a few weeks ago showing a robust addition of 240,000 jobs. This persistent strength in the US economy suggests the Federal Reserve has little reason to cut interest rates soon. This narrows the interest rate advantage that the Aussie dollar enjoyed for much of last year.

For traders, this environment of uncertainty points towards higher volatility in the coming weeks. We should consider using options to define our risk, such as buying puts to hedge existing long AUD positions. For those anticipating a breakout, strategies like long straddles could be effective if we expect a sharp move but are unsure of the direction.

The next major data points to watch will be the upcoming Australian employment figures and the RBA’s meeting minutes. These events will give us a clearer signal on domestic economic health and the central bank’s thinking. We should remain cautious until these reports clarify whether the speculative buying will resume or if this pause marks the beginning of a larger pullback.