The Canadian Dollar (CAD) stayed fairly steady against a stronger US Dollar (USD). It held up better than many major currencies, helped by stable risk mood and record levels in the S&P 500.

Moves in the CAD were limited, with little domestic news to drive trading. Day-to-day direction was tied mainly to the wider USD trend and the market risk backdrop.

Stocks were slightly lower in early trading, after the S&P 500 reached another record high the day before. The USD/CAD rate rose for a third day, but the short-term setup was still described as bearish.

The USD move was framed as a small rebound from Tuesday’s low, with patterns such as a bear flag or wedge mentioned. Trend indicators were said to remain bearish across intraday, daily, and weekly timeframes.

Resistance for USD/CAD was placed in the low to mid-1.37 area. Support was seen at 1.3625, with the next level described as the low 1.35s.

The Canadian Dollar is showing notable resilience, outperforming other major currencies against the US Dollar. This strength is supported by robust risk sentiment, with the S&P 500 closing above 5,900 last week. It suggests that positive market mood is currently outweighing broad USD strength for the CAD.

Given the weak technical backdrop for USD/CAD, we see the current minor bounce as an opportunity to position for further downside. We view any move into the low-to-mid 1.37s as a strong selling zone for entering short futures positions or buying put options. Trend indicators across weekly and daily charts reinforce this bearish bias.

Fundamentally, the CAD is underpinned by firm WTI crude prices, which have held above $85 per barrel this month. Canada’s latest CPI reading for March 2026 came in at a stubborn 2.9%, suggesting the Bank of Canada may remain hesitant to cut rates ahead of the Fed. This policy divergence gives the CAD a supportive yield advantage.

This marks a significant shift from the market dynamics we observed in 2025, when aggressive Fed tightening consistently pushed the USD higher. The failure of USD/CAD to break and hold above the 1.38 level earlier this year indicates that the upward momentum from last year has faded. Traders should adjust for this new regime.

For traders using options, consider establishing bearish positions like bear put spreads to cap risk while targeting a move lower in the pair. The initial support at 1.3625 serves as a first target, with a fuller move toward the low 1.35s being the ultimate objective in the coming weeks. Monitor these levels closely as potential profit-taking zones.

ServiceNow (NOW) shares fell 10% in early trading after its latest earnings report. Earnings per share were $0.97, in line with estimates, and revenue was $3.77 billion, slightly above forecasts.

The company’s forward guidance pointed to margin pressure and ongoing concerns around AI software. The stock was trading near $90 at the time referenced.

Technical analysis in the text identified a support zone at $71 to $68 per share. This area was linked to a trendline pivot low from 2022–2023 and to a declining wedge pattern.

The wider market was described as being at all-time highs in the same period. A 10% fall in the S&P 500 was cited as a potential trigger that could push ServiceNow towards the $71–$68 range.

The approach described was to avoid taking a position and wait for the share price to reach the stated support level. This was framed as a risk-control measure based on price action.

Given the weak forward guidance we saw in the late 2025 earnings report, a direct bet on further downside is a clear first step. Buying put options with strike prices around $80 or $75 would allow us to profit as the stock falls from its current $90 level. This move anticipates a broader market correction, as the S&P 500’s P/E ratio at that time was hovering above 21, a level historically vulnerable to pullbacks.

The concerns over margin compression were not new to us, as reports throughout 2025 showed rising competition in the AI software space was forcing higher research and development spending. Federal Reserve commentary at the time also signaled a “higher for longer” interest rate environment, which tends to punish growth stocks with high valuations like ServiceNow. These macro factors support the case for a continued slide in the share price.

For those looking for a more conservative trade, a bear call spread offers an alternative. By selling a call option above the current price, say at $95, and buying a further out-of-the-money call, we can collect a premium. This strategy profits if the stock moves down, sideways, or even slightly up, making it a high-probability trade if we believe the stock will not rally strongly in the near term.

However, the most compelling strategy is to use options to get paid while we wait for the price to hit that key $68-$71 support level. We should consider selling cash-secured puts with a strike price of $70, expiring in the next several weeks. This approach allows us to collect income immediately from the option premium.

If the stock never drops to $70, we simply keep the premium and can repeat the trade. But if the market does pull back and push the shares down, we get to buy the stock at our target price, which is a major support pivot we identified from the 2022-2023 trading period. This effectively lets us set our entry price while generating income.

AUD/USD traded near 0.7140 on Thursday, down 0.27% on the day, and stayed in a tight range as sentiment remained weighed down by geopolitical tensions.

Australian data offered some support, with S&P Global PMI reports showing manufacturing back in expansion and services rebounding. The outlook stayed uncertain due to weak demand and rising costs.

Risk appetite fell as tensions between the US and Iran increased, following incidents in the Strait of Hormuz and no progress in peace talks. This lifted demand for safe-haven assets and weighed on risk-linked currencies such as the AUD.

Société Générale said the AUD is exposed because Australia relies on imported petroleum products. It said any extended supply disruption could increase AUD volatility.

In the US, Initial Jobless Claims rose to 214K, above expectations, but the market reaction was limited. Attention remained on geopolitics and oil prices.

The USD also drew support from higher Treasury yields and lower expectations of Federal Reserve rate cuts, with the Dollar Index (DXY) edging higher. Markets also awaited US PMI figures later in the day.

We are seeing AUD/USD struggle around 0.6550, pressured by a risk-off mood as global growth fears resurface. This feels very similar to the environment in 2025 when US-Iran friction kept the Aussie pinned down despite some decent local data. The dynamic of global fears trumping domestic positives is repeating itself.

While we’ve seen Australian inflation cool slightly to 3.2% this past quarter, the Reserve Bank of Australia is staying cautious, which limits the Aussie’s upside. Just as we saw in 2025 with petroleum supply fears, the current weak demand from China is weighing heavily on sentiment for the currency. This makes selling out-of-the-money AUD call options an attractive way to collect premium while betting that the currency’s upside remains capped.

On the other side, the US Dollar Index (DXY) is holding firm above 105, supported by the 10-year Treasury yield pushing back towards 4.5%. With US Non-Farm Payrolls consistently adding over 200,000 jobs each month in early 2026, the market is pricing out any near-term Federal Reserve rate cuts. This robust US backdrop suggests that any rallies in AUD/USD are likely to be sold into.

Given this environment, we believe traders should consider buying AUD/USD put options with a one-to-two-month expiry. This strategy provides downside exposure while capping the maximum loss if sentiment suddenly improves. The implied volatility on the pair has risen to 9.5%, suggesting the market is bracing for bigger swings, making puts a potentially cost-effective way to position for further weakness.

The US Department of Labor said new US unemployment insurance claims rose to 214,000 in the week ending 18 April. This was up 6,000 from the prior week’s revised total, which was adjusted to 208,000 from 207,000.

Seasonally adjusted insured unemployment for the week ending 11 April was 1.821 million. This was up 12,000 from the prior week’s revised level, which was changed to 1.809 million from 1.818 million.

After the release, the US dollar kept its intraday gains across the foreign exchange market. The data did not prompt a clear market move, with attention remaining on Iran war developments and crude oil prices.

We see the latest jobless claims figures, with new filings at 214,000, as confirmation that the US labor market remains tight. This number is not high enough to signal any economic weakness, keeping it well within the stable range we observed throughout much of 2024 and 2025. This stability gives the Federal Reserve little incentive to consider lowering interest rates in the near future.

This steady employment data must be viewed alongside the last Consumer Price Index report, which showed core inflation holding stubbornly at 3.6%. With a strong job market providing no relief on the inflation front, we should expect the Fed to maintain its restrictive policy stance. This makes derivatives plays that bet on interest rates staying high, like selling calls on December SOFR futures, a sound strategy for the coming months.

The market’s muted reaction to the labor data correctly tells us that the focus is elsewhere. The primary driver of risk right now is the conflict in Iran, which has pushed Brent crude oil futures to consistently trade above $95 per barrel. Historically, such a rapid 15% rise in oil prices over a quarter, as we’ve seen since February, often precedes a spike in market volatility.

Given this, implied volatility in the broader equity markets, as measured by the VIX index hovering around 15, seems too low. The real threat to the market is an external oil shock, not a gradual softening of US labor. We should consider buying VIX call options or options on oil ETFs to hedge against a sudden geopolitical escalation.

The US Dollar’s strength, with the DXY index climbing to a two-year high of 107.5, is supported by both high interest rates and its safe-haven appeal. The steady labor report simply removes a potential headwind for the dollar. We can use currency options to bet on this trend continuing, particularly against economies more sensitive to high energy prices.

US continuing jobless claims were 1.821 million for the week ending 10 April. The forecast was 1.82 million.

The reported figure was 0.001 million higher than the forecast. This equals a difference of about 1,000 claims.

We saw an early warning sign when continuing jobless claims data from April 10, 2025, showed a slight miss against forecasts. That figure, at 1.821 million, was a subtle signal of a cooling labor market. This began a slow but steady trend that influenced Federal Reserve policy discussions throughout the rest of that year.

That trend has now become much clearer, with the most recent report showing continuing claims have climbed to 1.95 million. This persistent softness in the labor market prompted the Fed to initiate its rate-cutting cycle, with two cuts so far this year bringing the federal funds rate to a target range of 4.50%. The market is now absorbing this new reality of slower growth, reflected in the latest Q1 GDP report of a sluggish 1.8%.

Given this environment, we expect volatility to remain a key theme for the next several weeks. The CBOE Volatility Index, or VIX, has been hovering near 18, which is noticeably higher than the calmer periods we experienced back in 2024. This suggests traders should consider buying protection, such as long puts on major indices like the SPY, to hedge against further economic weakness.

Positions should also be taken based on the clear direction of monetary policy. Fed funds futures are currently pricing in a greater than 60% chance of another rate cut by the September FOMC meeting. This makes derivatives tied to interest rates, like options on Treasury bond futures, an attractive way to trade the Fed’s dovish stance.

Canada’s Raw Materials Price Index rose by 12% in March. This was above the forecast of 9.3%.

The result was 2.7 percentage points higher than expected. The release compares the actual figure with the forecast.

The March Raw Material Price Index number is a significant surprise, coming in much hotter than anyone anticipated. This indicates that input costs for Canadian producers are accelerating, which will likely feed directly into broader inflation. We must now seriously reconsider the odds of a Bank of Canada rate cut in the second quarter.

This forces us to re-evaluate our positions on short-term interest rates. The market is now quickly pricing out the probability of a summer rate cut, with overnight index swaps showing a shift in expectations towards holding rates steady through the next meeting. We saw a similar dynamic in 2025 when a string of hot data points forced the Bank to delay its dovish pivot, and derivative markets that were positioned for cuts got burned badly.

For the Canadian dollar, this is a decidedly bullish signal. Higher interest rate expectations will attract capital, strengthening the loonie against the US dollar. We should be looking at buying call options on the CAD or selling USD/CAD futures, as the pair could test lower supports in the coming weeks. Recent data shows Canada’s core inflation has remained stubbornly sticky above 3%, and this raw materials print will only add to the Bank of Canada’s concerns.

On the equity front, the S&P/TSX 60 presents a more complex picture. Our large energy and materials sectors, which together account for over 30% of the index, should benefit from the high commodity prices reflected in this report. However, the threat of higher-for-longer interest rates will weigh heavily on rate-sensitive sectors like banks, utilities, and real estate, so we could see significant underperformance there.

US initial jobless claims for the week ending 17 April came in at 214,000. The forecast was 212,000.

Looking back to April 2025, we see that the initial jobless claims number coming in slightly hot at 214K was an early signal. That figure, alongside others throughout last year, helped build the case for the economic cooling we are seeing now. This trend of a softening labor market has continued, with the most recent March 2026 jobs report showing a gain of only 150,000 jobs, well below the previous year’s average.

Given this context, we believe the Federal Reserve’s pivot toward easing is becoming more certain. The CME FedWatch Tool now indicates a greater than 70% probability of a rate cut by the September 2026 meeting, especially with core inflation finally nearing 2.5%. Traders should therefore consider buying calls or call spreads on SOFR futures to position for lower rates ahead.

This policy shift introduces significant uncertainty, which is likely to increase market volatility. The tension between lower rates being good for equities and a slowing economy being bad creates a perfect environment for price swings. We are therefore looking at buying VIX calls as a direct bet on rising market turbulence in the coming weeks.

A dovish Fed historically leads to a weaker U.S. dollar as interest rate differentials narrow. We saw the Dollar Index (DXY) fall nearly 5% in the six months following the Fed’s last pivot in 2019. Consequently, using options to establish long positions in pairs like the EUR/USD or GBP/USD appears to be a logical move.

The underlying economic slowdown that these labor market figures suggest also raises concerns about corporate credit. We anticipate credit spreads will widen as financial conditions for businesses become more challenging. Traders should consider buying protection via credit default swap indices like the CDX IG to hedge against, or profit from, this potential weakness.

The International Energy Agency warned of the biggest energy security threat in history, linking it to supply disruption from the Iran conflict and the closure of the Strait of Hormuz. The Iran talks were described as stalled, with the strait mostly shut.

Vessel traffic through Hormuz fell to two from three the previous day, alongside reports of Iranian gunboats firing on commercial ships. The US intercepted two oil tankers and escorted a third in the Indian Ocean, while Reuters reported three more interceptions in Asian waters near Sri Lanka and Malaysia.

Market moves included rising gasoline and diesel crack spreads and increased Brent put activity for June and July. June–July backwardation reached $6.50 overnight.

Around 13 million barrels per day of oil supply were reported lost, with the route under a double blockade. The strait previously carried average flows of 20 million barrels daily.

The disruption was expected to weigh on global growth, raise inflation, and increase the risk of fuel shortages, with Europe facing possible jet fuel constraints within weeks. Emergency stock releases were described as temporary support, with reopening the strait presented as necessary and diversification and demand reduction listed as options if shortages continue.

The ongoing closure of the Strait of Hormuz is the primary driver for energy markets as of April 23, 2026. With Brent crude futures holding firm above $135 this morning, the severe supply shock is being fully priced in by the market. The extreme backwardation between the June and July contracts, which we’ve seen widen past $6.50, signals a desperate scramble for immediate barrels.

We believe traders should focus on strategies that benefit from sustained high prices and tight physical supply. This includes buying front-month Brent or WTI call options to capture further upside from any escalation in the conflict. Looking back at the market of 2022, the backwardation spreads we see now are nearly double what they were during the peak of the post-Ukraine invasion panic, suggesting a more severe setup for calendar spread trades.

The surge in crack spreads for gasoline and diesel, now exceeding $60 a barrel according to the latest figures, points to extreme refiner profitability. This makes long positions in RBOB gasoline and ULSD heating oil futures attractive, potentially even more so than crude itself. We are seeing a significant risk of fuel shortages, particularly for jet fuel in Europe, which could push those specific product prices even higher.

The pronounced rise in options activity reflects deep uncertainty about the conflict’s duration, with implied volatility on near-term Brent options jumping over 85%. While the primary trend is bullish, the noted increase in put buying for June and July suggests some players are also hedging against a sudden diplomatic breakthrough that could cause prices to collapse. This makes strategies that profit from large price swings, in either direction, worthy of consideration.

We must remember that emergency stock releases are only a temporary fix for a loss of 13 million barrels per day. The latest weekly data confirms the U.S. Strategic Petroleum Reserve has already fallen by another 12 million barrels, reaching its lowest level since 1983. This limited buffer means any extension of the blockade into the summer driving season will magnify the supply crisis significantly.

The euro fell against the US dollar for a third day on Thursday, reaching about 1.1680, its lowest level since 13 April. Market mood weakened as the US-Iran peace process stalled, while eurozone business activity data came in weaker overall.

In the eurozone, the preliminary HCOB PMI showed manufacturing rising to 52.2 from 51.6 in March, beating the 50.8 forecast and marking its highest level in nearly four years. Services fell to 47.4 from 50.2, below the 49.8 forecast, pulling the composite index down to 48.6 from 50.7 versus a 50.2 expectation.

Oil prices rose as the Strait of Hormuz remained closed, adding pressure to crude-importing eurozone economies. Iran seized two ships on Wednesday, and the US military redirected three Iranian tankers in Asian waters.

Attention later turns to US weekly Jobless Claims, expected to show a moderate rise, ahead of the preliminary US S&P Global PMI for April. Technically, EUR/USD broke a late-March uptrend, with RSI nearing oversold and the MACD histogram showing widening red bars.

Support sits near 1.1680, then 1.1643, with further support at 1.1505–1.1525. Resistance is near 1.1720, then around 1.1765.

Given the combination of geopolitical risk and weakening Eurozone data, we should anticipate further downside in the EUR/USD. Buying put options with strike prices near the 1.1643 and 1.1525 support levels would be a direct way to position for this move. This strategy allows us to capitalize on the negative momentum while clearly defining our maximum risk.

The pressure from rising oil prices due to the Strait of Hormuz closure cannot be underestimated. We saw this playbook back in 2022 when the energy shock following the conflict in Ukraine sent Eurozone inflation to a peak of 10.6%. That historical event shows how vulnerable the Euro is to energy crises, supporting a bearish outlook as long as tensions with Iran remain high.

The divergence between a surprisingly strong Eurozone manufacturing PMI and a contracting services sector points to an uneven and fragile economy. This reminds us of the dynamic in 2023, when the US economy grew a robust 2.5% while the Euro area stagnated at just 0.5% growth. This fundamental economic gap reinforces strategies that favor the US dollar over the euro.

Technically, the break of the upward trendline is a significant bearish signal. With the Relative Strength Index (RSI) approaching oversold territory but not yet there, the pair has more room to fall. We should remember how quickly the EUR/USD broke below parity in 2022 once key supports failed, indicating that this downward momentum could accelerate.

The high level of uncertainty means that implied volatility in the options market is likely rising. This makes selling out-of-the-money call spreads an attractive strategy for us to consider. By doing so, we collect premium based on the view that the pair will not be able to reclaim the 1.1765 resistance level in the coming weeks.

GBP/USD traded near 1.3500 on Thursday and was little changed on the day. It recovered earlier losses after UK activity data came in stronger than expected.

S&P Global flash data showed the UK Composite PMI rose to 52 in April. This was above the 49.8 forecast and the prior 50.3 reading.

The rebound was supported by gains in both major sectors. Manufacturing PMI increased to 53.6, while Services PMI rose to 52.

In Asian trading on Thursday, GBP/USD stayed subdued for a third day and hovered around 1.3500. The pair slipped below 1.3500 and moved beneath an ascending channel, which can point to a bearish shift.

Despite that move, the pair remained just above the nine-period EMA and well above the 50-period EMA. The 14-day RSI was near 56, indicating positive momentum that was not stretched.

The current stability around 1.3500 in GBP/USD presents a classic dilemma for traders. We’re seeing strong UK economic data, like the surprise jump in the April PMI to 52, which naturally supports the pound. However, this is running into a wall of persistent demand for the US dollar.

This rebound in UK business activity is significant, especially after the economic slowdown we experienced in the second half of 2025. With the latest inflation print from March coming in at a stubborn 3.1%, this PMI data might make the Bank of England hesitant to signal any rate cuts soon. This backdrop suggests underlying strength for Sterling in the near term.

On the other side of the trade, the dollar’s strength isn’t weakening. The US economy continues to outperform, with the March jobs report showing a robust addition of over 260,000 jobs, keeping the unemployment rate below 4%. This gives the Federal Reserve every reason to maintain its “higher for longer” stance on interest rates.

For us, this suggests playing the range rather than betting on a major breakout in the immediate weeks. Buying straddles or strangles could be a viable strategy to profit from a potential spike in volatility, regardless of which central bank narrative wins out. These positions benefit if the pair makes a sharp move in either direction away from the 1.3500 level.

Alternatively, for those who believe the pair will remain caught in this tug-of-war, selling volatility through an iron condor might be attractive. This strategy profits if GBP/USD stays within a defined range, capitalizing on the current stalemate. Using bull put spreads or bear call spreads could also be a way to express a directional view with clearly defined risk.