A Bottoming Signal Has Emerged, Indicating a Potential Short-term Rebound

Forex

Summary:

Following a sharp decline, the USDJPY pair has shown technical signs of bottoming out, suggesting a potential technical rebound in the near term.

BUY USDJPY

EXP

TRADING

152.690

Entry Price

155.600

151.400

153.922 +0.818 +0.53%

0.0

Pips

Flat

151.400

Exit Price

152.690

Entry Price

155.600

Fundamentals

The USDJPY pair experienced a sharp short-term correction, with prices sharply declining from recent highs and fluctuating within the 153.00–152.00 range. The prevailing market narrative is driven not solely by interest rate differentials or macroeconomic data but predominantly by market expectations of increased Japanese authorities' proactive responses to yen volatility. The Japanese Finance Minister's public commitment to take "appropriate action when necessary" and emphasis on close coordination with U.S. authorities have visibly shifted risk premiums, prompting swift short covering in the yen.

Simultaneously, the dollar has come under pressure, with escalating political and policy uncertainties fueling dollar sell-offs. Market interpretations of statements by U.S. political figures suggest tolerance for dollar depreciation, further boosting yen buying interest. Overall, the combination of dollar weakness and Japanese official communication signals has shifted the short-term exchange rate dynamic from interest rate differential-driven fundamentals to a political/intervention risk narrative. This shift has led to extraordinary intraday declines in USDJPY over the past few trading sessions, with the price temporarily breaking above the 153 level.

It is important to emphasize that there is informational asymmetry and uncertainty regarding the actual extent of Japan's market intervention. Some official and market reports indicate that Tokyo authorities engaged in intensive communication and conducted "interest rate/market condition assessments," yet publicly available central bank disclosures do not provide conclusive evidence of substantial yen purchases on specific trading days. In other words, the market's "intervention expectation effects" may have a more significant impact on prices than the actual intervention itself. Traders should differentiate between the risks associated with "policy signals/coordination announcements" and "confirmed official interventions."

Technical Analysis

A Bottoming Signal Has Emerged, Indicating a Potential Short-term Rebound_1

In the 4H timeframe, the USDJPY currency pair has transitioned from an upward channel to a rapid downtrend accompanied by increased volatility. The price has swiftly broken below several short-term moving averages, forming a bearish gap. Key support levels are identified at 152.00–151.50, followed by around 151.00. Resistance levels are concentrated near recent retracement points and the confluence zone of short-term moving averages, approximately 154.60–156.00.

Technical indicators, such as RSI and other momentum oscillators, have entered oversold territory in the short term, suggesting the potential for a technical rebound or consolidation phase.

Currently, the 4H candlestick pattern shows a bullish engulfing formation, indicating that the price may stabilize after holding the 152.00 support level, with prospects for a gradual upward correction increasing.

Trading Recommendations

Trading Direction: Buy

Entry Price: 152.40

Target Price: 155.60

Stop Loss: 151.40

Valid Until: February 11, 2026 23:00:00

Support: 152.00, 151.50

Resistance: 154.60, 156.00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Manuel

Forex

Economic

Summary:

As these averages continue to track the primary trend, they are expected to converge toward our zone of interest in the coming sessions.

BUY EURUSD

EXP

PENDING

1.18950

Entry Price

1.20500

1.18150

1.19102 -0.00600 -0.50%

Pips

PENDING

1.18150

Exit Price

1.18950

Entry Price

1.20500

Market participants have almost entirely priced in a "hold" decision from the Federal Reserve, with interest rates expected to remain within the 3.50%–3.75% range at the conclusion of Wednesday's policy meeting. This pause follows three consecutive rate cuts implemented throughout 2025. Investor focus is shifting toward the subsequent press conference, as any forward-looking guidance could prove pivotal for currency valuations. A more hawkish tone from Fed officials possesses the potential to provide short-term support for the U.S. Dollar.

On the macroeconomic front, recent U.S. data indicated a deterioration in consumer confidence, according to the Conference Board index. This was compounded by the latest ADP Employment Change 4-week average, which showed a loss of momentum, descending from 8,000 to 7,750. Simultaneously, escalating trade tensions—now focused on South Korea—are injecting volatility into the markets. President Donald Trump’s warning regarding a potential 25% tariff on South Korean goods initially pressured the Greenback while reinforcing demand for safe-haven assets. Consequently, Gold has surged 17.72% year-to-date, challenging the historic 60% gains recorded in 2025.

In Europe, Germany's economic pulse remains subdued, as evidenced by the latest IFO Business Climate Index. The indicator held steady at 87.6 in January, missing market expectations of an improvement to 88.1. While the current assessment sub-index saw a marginal gain, the expectations component retreated, reinforcing the narrative of a fragile recovery hampered by persistent structural issues. This was reflected in the preliminary PMI figures, where the manufacturing sector remains in contraction while services expansion moderated. Against this backdrop, European Central Bank policymakers have maintained a prudent, data-dependent stance, avoiding discussions on imminent rate shifts.

Finally, geopolitical tensions continue to inject risk premiums into European assets. Despite diplomatic efforts, the conflict between Russia and Ukraine remains highly active, with recent large-scale drone offensives and strikes on energy infrastructure in Krasnodar ensuring that global market volatility remains elevated. Corrective Phase Targets Major Fibonacci Confluence For Potential Rebound_1

Corrective Phase Targets Major Fibonacci Confluence For Potential Rebound_1

Technical Analysis

The EUR/USD pair reached an intraday peak of 1.2083 during the previous session, a move largely driven by broad Dollar depreciation following President Trump's remarks that the currency was "doing fine." However, this overextended rally has pushed the pair into extreme territory, suggesting that a technical correction is likely on the horizon.

A potential corrective phase would target a high-value support cluster between 1.1895 and 1.1844. These levels are strategically significant as they align with the 0.50 and 0.618 Fibonacci retracement levels of the recent impulse. A successful defense of this area could serve as a catalyst to reactivate the broader bullish trend.

Supporting the case for a pullback, the Relative Strength Index (RSI) hit a high of 85, entering deep overbought territory. This exhaustion signal suggests that the current move is reaching a climax and requires a period of consolidation. Meanwhile, the 100 and 200-period Moving Averages are situated at 1.1821 and 1.1740, respectively. As these averages continue to track the primary trend, they are expected to converge toward our zone of interest in the coming sessions.

If the price exhibits a bullish reaction from this support confluence, the uptrend is expected to resume. However, traders should monitor these levels closely, as a failure to hold the 0.618 Fibonacci level could signal a deeper structural shift.

Trading Recommendations

Trading direction: Buy

Entry price: 1.1895

Target price: 1.2050

Stop loss: 1.1815

Validity: Feb 06, 2026 15:00:00

Risk Warnings and Disclaimers

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Manuel

Economic

Central Bank

Summary:

The pair is currently in a corrective consolidation phase, drifting toward a major technical "Value Area" where the 100 and 200-period Moving Averages converge at 184.29 and 184.08, respectively.

SELL EURJPY

EXP

PENDING

184.160

Entry Price

181.000

184.900

183.330 +0.056 +0.03%

Pips

PENDING

181.000

Exit Price

184.160

Entry Price

184.900

The Japanese Yen's strength at the close of last week was largely fueled by speculation regarding potential coordinated intervention between the Federal Reserve and the Bank of Japan. However, in the absence of definitive signals or immediate action from either central bank, market participants have begun unwinding hedge positions in the Yen, effectively capping its recent support.

On the political front, rhetoric from Prime Minister Sanae Takaichi has reintroduced a layer of uncertainty. Her proposals for increased public spending and aggressive tax cuts ahead of the February 8th Lower House elections have reignited concerns over Japan's long-term fiscal sustainability. This backdrop has led to increased volatility in Japanese government bond yields and remains a significant structural headwind for the Yen. From a macroeconomic perspective, while producer price inflation is moderating, the relief is not yet sufficient to derail the Bank of Japan’s progressive normalization path. In fact, the BoJ recently upwardly revised its economic forecasts while maintaining its readiness to adjust policy should the environment warrant further tightening.

Complementing this, Friday’s preliminary PMI figures offered a mixed outlook. The manufacturing sector showed signs of stabilization but remains firmly in contractionary territory. Conversely, while the services sector continues to expand, it is doing so at a more moderate pace than anticipated. At the Eurozone level, the Services PMI retreated to 51.9 in January, undershooting forecasts and highlighting weak domestic demand. Against this backdrop, European Central Bank policymakers adopted a prudent tone in their December deliberations, avoiding discussions on rate shifts while reiterating a data-dependent, meeting-by-meeting approach.

Finally, geopolitical tensions continue to inject risk premiums into European assets. Despite U.S.-led diplomatic efforts to mediate between Russia and Ukraine, the conflict remains highly active. Recent reports of large-scale drone offensives and strikes on Russian energy infrastructure in Krasnodar have ensured that volatility remains elevated across global markets. Technical Rejection Near Key Moving Averages Points Toward Further Downside_1

Technical Rejection Near Key Moving Averages Points Toward Further Downside_1

Technical Analysis

EUR/JPY underwent a sharp bearish rejection after testing the local peak of 186.87 on January 23rd, a move largely driven by intervention speculation. The pair is currently in a corrective consolidation phase, drifting toward a major technical "Value Area" where the 100 and 200-period Moving Averages converge at 184.29 and 184.08, respectively.

Notably, the 184.12 level represents last week’s closing price. A retracement to this zone would effectively fill the weekend gap, often a precursor to a trend resumption. Given that this area aligns with both the moving average confluence and horizontal resistance, it serves as a high-probability pivot point for the bears to reclaim control.

Our momentum analysis via the MACD confirms that the current upward move is a corrective retracement within a broader bearish structure. Although the histogram is currently printing bullish bars, the signal lines remain entrenched below the neutral zone, indicating that the primary trend is still down.

As the price approaches this key confluence, we are looking for a bearish pivot in the histogram. Such a turn would open the path for a target at 180.98, which represents the 0.618 Fibonacci expansion of the initial downward impulse. While the correction is currently in play, the technical structure favors a bearish continuation as long as the price remains below the moving average cluster.

Trading Recommendations

Trading direction: Sell

Entry price: 184.16

Target price: 181.00

Stop loss: 184.90

Validity: Feb 06, 2026 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Forex

Summary:

Canada's retail sales rose 1.3% month-over-month in November, but growth slowed in December.

BUY USDCAD

EXP

TRADING

1.35987

Entry Price

1.40000

1.34100

1.35372 +0.00491 +0.36%

0.0

Pips

Flat

1.34100

Exit Price

1.35987

Entry Price

1.40000

Fundamentals

The USDCAD extended its overnight rebound from the 1.3670 level on Tuesday, gaining upward momentum for a second consecutive trading session. Spot prices maintained modest intraday gains during European trading hours, currently trading around the 1.3700 range with a daily increase exceeding 0.18%.

Data released last week showed Canada's retail sales rebounded strongly in November, rising 1.3% month-over-month to CAD 70.4 billion, slightly exceeding the prior forecast of 1.2%. Growth was widespread across sectors, with sales increasing in eight out of nine sub-sectors. Spending at food and beverage retailers saw the most significant rise, indicating robust consumer demand persisted through the year-end period.

Underlying growth momentum remains robust. Core retail sales excluding gasoline and automobiles rose 1.6% month-over-month, indicating that strong household spending extends beyond volatile categories and reflects steady demand for discretionary goods.

However, the outlook is not optimistic. Preliminary estimates from Statistics Canada indicate that retail sales in December may have declined by 0.5% month-over-month, suggesting that the strong growth momentum seen in November may not have been sustained.

Market Watch: Canada's economy staged a welcome rebound in November, though it delivered little in the way of exciting growth. Part of the increase reflected market volatility tied to labor disputes rather than a substantive improvement in underlying demand. This rebound followed a weak and downwardly revised October, and growth momentum has already begun to slow in December. Setting aside monthly fluctuations, the underlying trend in actual sales remains negative. Weak consumer confidence may be a key factor. The Bank of Canada's latest consumer survey indicates growing household pessimism about their financial situation, which is influencing spending decisions.

Our outlook for actual consumption growth in the fourth quarter remains subdued, with quarter-on-quarter growth projected to approach 0.9% (annualized). There exists some upside risk in the services sector, as its growth momentum is expected to gradually strengthen toward year-end. However, we believe the pace of services sector growth will be insufficient to lift overall consumption growth significantly above its trend level.

Canada's Consumption Momentum Overdrawn; December Forecast Downturn Limits CAD Rebound Potential_1

Technical Analysis

The USDCAD has shifted from its earlier sharp decline to a neutral intraday trend, with prices currently rebounding. Some consolidation is expected above the temporary low at 1.3670. An upward momentum will persist as long as the pair breaks above the 4H 55 SMA (currently at 1.3788).

On the other hand, this level also warrants attention. Currently, the exchange rate remains below this level, with upward resistance still intact. A break below 1.3670 would trigger a retest of the 1.3641 support level. Should this support level be decisively breached, the downtrend originating from 1.4139 would resume, potentially leading to another test of the 1.3538 low.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.3600

Target Price: 1.4000

Stop Loss: 1.3410

Valid Until: February 22, 2026 23:55:00

Support: 1.3670, 1.3642, 1.3575

Resistance: 1.3739, 1.3801, 1.3929

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

NZD/USD is undergoing bullish consolidation within an established uptrend. Unless price decisively breaks below 0.5950, the setup favors an upside continuation toward 0.6030 and potentially 0.6070 in the near term.

BUY NZDUSD

EXP

PENDING

0.59850

Entry Price

0.60700

0.59100

0.60432 -0.00352 -0.58%

Pips

PENDING

0.59100

Exit Price

0.59850

Entry Price

0.60700

The New Zealand Dollar is staging a remarkable and sustained assault on the US currency, a move that speaks less about explosive Kiwi strength and more about a foundational crisis of confidence in the world’s reserve currency. As of this writing, NZD/USD trades robustly around 0.5990, marking a 0.75% gain on the session and carving out a fresh four-month high just a whisker above the 0.6000 psychological milestone. This isn’t a flash in the pan; it’s the seventh consecutive day of gains, a relentless grind higher that has shifted the technical and narrative landscape for the pair.

The primary engine of this move is unequivocally the US Dollar’s broad-based infirmity. The Greenback is underperforming against every major currency at the week’s open, a stark universal retreat that has pushed the US Dollar Index (DXY) to languish near multi-month lows. The weakness is pervasive, and in my analysis, it stems from a toxic confluence of political and monetary anxieties that are prompting a global portfolio reassessment.

Let’s be blunt: Washington is becoming a millstone around the Dollar’s neck. The market is grappling with a trifecta of corrosive uncertainties. First, the escalating global trade tensions, with the US at the epicenter, threaten to disrupt supply chains and dampen the very global growth that the US economy relies upon for exports. Second, the looming and increasingly contentious fiscal budget debates threaten another cycle of government shutdown brinkmanship, underscoring governance dysfunction. Most critically, there is a whispered but growing discourse in financial circles questioning the independence of the Federal Reserve from political pressure. This last point strikes at the heart of the Dollar’s credibility. A central bank perceived as potentially malleable to political whims loses its inflation-fighting anchor, and investors are starting to price in that long-term risk.

This political malaise sets the stage for this week’s main event: the Federal Reserve’s policy decision on Wednesday. The consensus is for rates to remain on hold, a pause following the cumulative cuts delivered last year. But in this environment, a simple “hold” is not enough to stanch the Dollar’s bleed. The market will dissect every syllable of the policy statement and hang on every nuance from Chair Jerome Powell’s subsequent press conference. Investors are desperate for clarity on the terminal point of this easing cycle. Any hint of dovishness—suggesting openness to further cuts should data soften, or expressing heightened concern over global headwinds—could be the catalyst for a decisive DXY breakdown, sending currencies like the Kiwi soaring even higher.

While the Dollar’s story is one of weakness, the New Zealand Dollar’s side of the ledger is shifting toward one of latent strength. Recent domestic data has fundamentally altered the interest rate narrative for the Antipodes. Last week’s fourth-quarter Consumer Price Index (CPI) report was a game-changer. Inflation didn’t just hold steady; it accelerated, printing firmly above market expectations. This data pulse has sent a jolt through rate expectations.

Suddenly, the chatter in dealing rooms has shifted. The discussion is no longer about when the Reserve Bank of New Zealand (RBNZ) might consider its next easing move. Instead, there is revived and serious speculation that the RBNZ may need to consider hiking interest rates in the medium term, or at the very least, maintain a significantly more restrictive and hawkish policy bias than its peers, notably the Fed. In a world where every basis point of yield is being scrutinized, this potential pivot provides a powerful fundamental magnet for capital flows.

Technical Analysis

From a technical perspective, NZD/USD remains positioned within a broader bullish structure, with price action continuing to respect a well-defined rising trend line that has guided the advance since mid-month. On the 30-minute chart, the pair is trading just below the 0.6000 psychological barrier, consolidating after a strong impulsive leg higher. This pause appears corrective rather than distributive, suggesting the market is digesting gains before a potential continuation move.

Price is currently compressing within a small symmetrical triangle/flag formation that has developed directly above the ascending trend line support. This structure typically reflects temporary equilibrium between buyers and sellers before trend resumption. Importantly, each dip within this consolidation has produced higher lows, reinforcing underlying demand and confirming that bulls continue to defend pullbacks.

Dynamic support is visible along the rising trend line intersecting near 0.5950–0.5960, which aligns closely with the base of the consolidation pattern. A sustained break below this zone would be the first technical signal that bullish momentum is fading. Beneath that, the next meaningful support sits around 0.5910–0.5920, a prior breakout area and minor structure shelf. A move below this region would shift the short-term outlook toward a deeper correction, potentially exposing 0.5870, where the broader trend leg accelerated earlier.

However, as long as price remains above the ascending trend support, the path of least resistance remains to the upside. The measured move projection from the consolidation pattern points toward an initial upside objective near 0.6030, followed by 0.6070, which marks a prior swing extension zone and aligns with the projected arrow on the chart. A decisive breakout above 0.6000 would likely trigger momentum buying and stop-driven flows, accelerating gains toward those higher resistance levels.

Momentum characteristics support the bullish continuation thesis. Although we don’t see visible oscillators on the chart, the price behavior itself shows healthy momentum rotation: sharp impulsive pushes followed by shallow, orderly pullbacks. This type of structure typically occurs in trending environments rather than topping phases. The recent pullback also helped relieve short-term overbought pressure without breaking structure — a constructive sign for trend sustainability.

Volume behavior (as inferred from candle expansion and contraction) also suggests accumulation during dips, not aggressive distribution. The inability of sellers to force a breakdown despite multiple attempts near trend support highlights persistent underlying demand.

TRADE RECOMMENDATION

BUY NZD/USD

ENTRY PRICE: 0.5985

STOP LOSS: 0.5910

TAKE PROFIT: 0.6070

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

Gold prices consolidate just below all-time peaks as markets await the Federal Reserve's policy decision.

BUY XAUUSD

Close Time

CLOSED

5101.80

Entry Price

5200.00

5050.00

5262.53 -113.78 -2.12%

751.4

Pips

Profit

5050.00

5176.94

Exit Price

5101.80

Entry Price

5200.00

The lustrous haven of gold continues to glimmer at historic elevations, with spot prices (XAU/USD) etching a seventh consecutive session of gains on Tuesday. Yet, in a testament to the market's palpable tension, the bullion finds itself in a holding pattern—unable to decisively shatter the $5,100 per ounce ceiling and retreating modestly from its record zenith during European trade. This pause is not a sign of weakness, but rather the deep breath taken by global traders as they brace for the seismic tremors expected from the Federal Reserve's impending policy verdict.

The narrative driving gold is a powerful confluence of structural demand and acute macroeconomic anxiety. While the immediate spotlight is fixed on the Fed's two-day meeting commencing today, the fundamental scaffold supporting gold has been constructed over months. It is a story of de-dollarization in slow motion, of sovereign portfolios seeking anchor in an era of political volatility, and of a retail investing public hedging against a fraying consensus on global stability.

"Gold's resilience here is extraordinary," remarked Lydia Martin, head of commodity strategy at Veritas Global in London. "We are seeing a classic push-pull between tactical caution ahead of the FOMC and a strategic, almost inexorable, bid from official and private sectors alike. The path of least resistance remains firmly higher."

The official sector's hunger for bullion is a relentless engine. Data reveals the People's Bank of China extended its publicized buying spree for a fourteenth straight month in December. Meanwhile, the National Bank of Poland, the Reserve Bank of India, and the Central Bank of Brazil have emerged as aggressive buyers in late 2025 and early 2026, signaling a broad-based shift among emerging market central banks towards diversification. This institutional demand creates a formidable floor for prices.

Simultaneously, the investment conduit of exchange-traded funds (ETFs) is flooding with capital. Preliminary 2025 figures indicate a staggering 25% annual increase in global gold-backed ETF holdings, ballooning to 4,025.4 tonnes from 3,224.2 tonnes in 2024. Total assets under management now approach $559 billion. This isn't speculative froth; it's a deliberate, large-scale reallocation into a non-correlated, non-yielding asset—a direct challenge to the dominance of yield-bearing Treasuries and equities.

The geopolitical and trade policy landscape provides the urgent catalyst for these flows. Over the weekend, the specter of disruptive US trade policy re-emerged as former President Donald Trump threatened to impose a 100% tariff on Canada should it proceed with a trade deal with China. This followed the now-retracted threat against Greenland, creating a whiplash-inducing environment for global supply chains and currency markets. These pronouncements have tangibly "tarnished the US Dollar's reputation," as one G10 forex head told me, driving a search for alternatives.

Further east, the war in Ukraine grinds on with no off-ramp in sight. The collapse of US-brokered talks in Abu Dhabi over the weekend, following Russia's demand for Ukraine to cede the entire Donbas region—swiftly rejected by Kyiv—only reinforces the market's view that protracted conflict is the base case. This constant hum of geopolitical risk feeds a steady drip of safe-haven demand.

Paradoxically, gold's ascent occurs even as the US Dollar attempts a hesitant recovery from a four-month low touched on Monday. The greenback's minor bounce is attributed to repositioning ahead of the Fed, but its broader trajectory has been undermined by market conviction that the central bank will execute two more rate cuts this year. Monday's robust Durable Goods Orders data for November—soaring 5.3% against a 0.5% forecast—did little to alter this dovish pricing, highlighting the market's focus on the future path over backward-looking strength.

This brings us to the immediate crucible: the Federal Open Market Committee. While no rate change is anticipated today, every syllable of Chair Jerome Powell's post-meeting press conference will be dissected for clues on the timing and depth of the anticipated 2026 easing cycle. The core question for gold traders is whether the Fed will validate the market's aggressively dovish stance. A reaffirmation of cutting bias would likely weaken the dollar and catapult gold past its current resistance. Any hint of pushback against market pricing could temporarily bolster the dollar and cap gold's rally.

The underlying thesis for gold has transcended the short-term Fed policy cycle. It is now fueled by a profound reassessment of global risk, the visible and sustained diversification away from dollar-centric reserves, and a deep-seated distrust in the stability of the international political order. The metal is no longer just an inflation hedge or a rate play; it has reasserted its ancient role as the ultimate monetary insulator.

As the clocks count down to the Fed's decision, the quiet bid beneath gold speaks volumes. It tells of a market that is preparing not for a single event, but for a more fractured and uncertain world. The record highs are not a destination, but likely a waypoint.

Technical Analysis

From a technical perspective, Gold (XAU/USD) is consolidating at historic highs following a powerful seven-session advance, reflecting a tactical pause ahead of a major macroeconomic catalyst. On the 30-minute chart, prices are compressing within a narrow range, with the current session trading between a high of 5,088.24 and a low of 5,082.82, and closing marginally lower at 5,086.06 (-0.02%). This low-volatility coiling action represents a moment of equilibrium as the market awaits the Federal Reserve's policy decision, which is expected to trigger the next significant directional move.

The broader structure remains profoundly bullish, underpinned by sustained institutional and ETF demand as detailed in the fundamental narrative. The immediate price action is testing the lower bound of its recent micro-range. The key near-term support is now established at today’s low of 5,082.82. A decisive break below this level could trigger a short-term, news-driven pullback toward the more significant support zone between 5,065.00 and 5,075.00, an area that aligns with the breakout level from the previous consolidation and would represent a healthy retest. A sustained move below 5,065.00 would be required to signal a deeper corrective phase, initially targeting 5,035.00.

On the upside, the immediate resistance and gateway for the next bullish leg is clearly defined at today's high of 5,088.24. However, the true breakout level that would signal a resumption of the powerful uptrend is the psychological and recent record high barrier at 5,100.00. A sustained push and close above this level would likely unleash a wave of momentum buying, fueled by the fundamental drivers of de-dollarization and safe-haven demand, swiftly shifting focus toward the 5,150.00 and then 5,200.00 psychological milestones.

Momentum indicators are neutral within this compressed pre-Fed range. The minor negative close on negligible volume indicates a balance between bulls booking profits and strategic buyers awaiting confirmation. This coiled momentum is characteristic of a market primed for a volatility expansion. The underlying bullish structure, supported by relentless fundamental inflows, suggests the path of least resistance remains higher, and any dip prompted by a hawkish-leaning Fed is likely to be met with strong institutional demand.

TRADE RECOMMENDATION

BUY GOLD (XAU/USD)

ENTRY PRICE: 5,101.50

STOP LOSS: 5,050.00

TAKE PROFIT: 5,200.00

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

The Euro-Yen cross (EUR/JPY) has clawed back from six-week lows, stabilizing near 183.00 as the market's panic over a potential joint Federal Reserve-Bank of Japan intervention subsides.

SELL EURJPY

EXP

TRADING

182.550

Entry Price

179.000

185.000

183.330 +0.056 +0.03%

0.0

Pips

Flat

179.000

Exit Price

182.550

Entry Price

185.000

A fragile calm has descended upon the Japanese Yen markets, but it’s the uneasy quiet of a storm that has merely shifted course, not dissipated. The Euro, trading just shy of the 183.00 handle against the Yen after a rebound from last week’s six-week trough near 182.00, embodies this tension. Its failed attempt to breach resistance around 183.65 earlier today tells the story: a market tentatively covering short-Yen positions but lacking the conviction to mount a full-scale reversal.

The immediate trigger for this pause in the Yen’s relentless slide is the fading specter of a coordinated central bank intervention. Last Friday’s revelation that both the Bank of Japan and the U.S. Federal Reserve were querying major banks for USD/JPY rate quotes sent a shockwave of pure, unadulterated fear through the speculative community. It was a classic "open mouth, open vault" operation—a direct and credible warning shot across the bows of carry traders that the 160.00 USD/JPY line is, indeed, a "line in the sand" for Tokyo and, critically, for Washington. The Yen exploded higher in response, a Pavlovian reaction to the memory of past, costly interventions.

Yet, by Tuesday, that conviction began to leach away. With USD/JPY retreating to the 156.00-157.00 zone and EUR/JPY failing to break down, the panic bid has evaporated. Traders are reasoning, for now, that the mere act of asking for prices achieved its goal: it bought time and instilled a measure of fear. The result is a Yen that is "trimming recent gains," as you note, but one that remains dramatically stronger than its 34-year lows of just days ago. The market is breathing, but it’s watching the exits.

However, to focus solely on intervention dynamics is to miss the profound undercurrent that has been re-awakened and now threatens to exert a more sustained gravitational pull on the currency: Japan’s fiscal sustainability. The catalyst here is unequivocally political. Prime Minister Sanae Takaichi’s decision to dissolve the lower house and call a snap election for February 8 was not met with applause in the bond and currency markets. It was met with a shudder.

Investors are decoding a clear and present risk: a strengthened electoral mandate for Takaichi translates directly into a turbocharging of her platform of "big spending and lower taxes." In any major economy, this combination amidst already record debt-to-GDP ratios would ring alarm bells. For Japan, where the Bank of Japan’s yield curve control has long blurred the lines between monetary and fiscal policy, it threatens to unravel a precarious equilibrium. The sell-off in the Yen across the board following the election announcement was a rational, if brutal, assessment of this risk. It’s a bet that Japan’s path may lead towards a fiscal stress that ultimately debases the currency, regardless of short-term rate differentials.

So, we arrive at the market’s current schizophrenic stance. On one shoulder sits the wary official, the BOJ’s stealthy rate checks, promising punitive action for excessive weakness. On the other whispers the fundamental analyst, charting a future of unchecked debt issuance and a potential loss of market confidence. This tug-of-war is producing the choppy, indecisive price action we see now.

Elsewhere, the European backdrop offers little directional impetus. A disappointing German IFO Business Climate reading on Monday served as a reminder of the Eurozone’s stagnant economic reality, capping the Euro’s rally potential. Later today, a speech by European Central Bank President Christine Lagarde is anticipated to be a non-event for markets—a reiteration of the data-dependent, June-cut script that is now fully priced. The primary drama remains squarely in the Pacific.

Technical Analysis

From a technical perspective, EURJPY has experienced a notable shift in its near-term structure following a decisive break of the primary bullish trendline that supported the rally from the December 2025 lows. On the 4-hour chart, prices have rejected the former trendline, which now acts as new resistance near 183.500, and are consolidating in a lower range. This break has invalidated the immediate bullish impulse and suggests a period of correction or consolidation is underway.

The 182.500 level, marked by today's low of 182.522, now serves as immediate and critical support. A sustained break and close below this level would confirm the bearish momentum from the trendline break and likely trigger a deeper corrective move toward the next significant support zone between 181.000 and 181.500. This area represents a previous consolidation platform from late January and a key psychological level. A decisive breakdown beneath 181.000 would signal a more pronounced corrective phase, potentially exposing the 179.000 handle.

Momentum indicators reflect this transition. The failure to hold the trendline and the subsequent lower close indicate a shift from bullish momentum to a corrective phase. This price action suggests the market is digesting the prior strong gains and seeking a new equilibrium before the next significant directional move.

TRADE RECOMMENDATION

SELL EURJPY

ENTRY PRICE: 182.550

STOP LOSS: 185.000

TAKE PROFIT: 179.000

Risk Warnings and Disclaimers

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