The euro edged lower against the Japanese yen on Tuesday, with EUR/JPY trading near 183.10 at the time of writing, down roughly 0.10% on the day, as investors navigated a fragile global risk environment marked by central bank uncertainty, softening European economic data, and intensifying geopolitical risks.

While the decline remains modest, price action reflects a broader hesitancy in currency markets, where traders are struggling to balance lingering doubts over the Bank of Japan’s policy normalization path against increasingly mixed signals from the Eurozone economy. The result has been a lack of conviction on both sides of the cross, leaving EUR/JPY vulnerable to near-term corrective pressure.

On the Japanese side, attention remains firmly focused on the BoJ after Governor Kazuo Ueda reiterated on Monday that the central bank stands ready to continue raising interest rates if economic activity and inflation evolve in line with its forecasts. Ueda’s remarks reinforce the view that Japan has entered a more durable inflation cycle—one that could eventually justify further tightening after years of ultra-loose monetary policy.

However, despite the hawkish undertone, markets remain skeptical about the timing of the next move. Most economists believe the BoJ is unlikely to act before mid-year, preferring to wait for confirmation from the spring “shunto” wage negotiations, which are expected to provide clearer evidence of sustained wage growth. This delay continues to cap the yen’s upside, as traders remain reluctant to price in aggressive tightening before concrete data emerges.

As a result, the yen’s traditional role as a safe-haven has been partially offset by policy uncertainty, limiting its ability to mount a decisive recovery despite rising geopolitical risks.

Meanwhile, the euro is facing its own headwinds. Earlier in the session, Eurozone PMI data were revised lower, adding to signs that economic momentum across the bloc remains fragile. The HCOB Services PMI for December was revised down to 52.4, indicating slower expansion in the services sector, while the Composite PMI was cut to 51.5 from an initial 51.9, reinforcing concerns that overall activity is losing steam into year-end.

Although readings above 50 still point to expansion, the downward revisions suggest that growth remains uneven and vulnerable, particularly as higher interest rates continue to weigh on demand. These figures have done little to strengthen the case for euro upside, especially against a currency like the yen that tends to benefit when risk sentiment deteriorates.

Markets are now turning their attention to Germany’s preliminary Harmonized Consumer Prices Index (HICP) for December, a release that could influence near-term euro positioning. Expectations are for a 0.4% month-on-month increase, and a stronger-than-anticipated reading could offer the single currency some temporary relief by reinforcing the European Central Bank’s cautious stance on easing. However, any support may prove short-lived unless inflation surprises meaningfully to the upside.

Beyond macroeconomic data, geopolitics continue to play a critical role in shaping FX sentiment. Renewed tensions between Russia and Ukraine remain a persistent drag on the euro, particularly given the Eurozone’s lingering vulnerability to energy supply disruptions. At the same time, recent escalation in Latin America, following a large-scale U.S. military operation targeting Venezuela, has injected another layer of global uncertainty into markets.

Historically, such developments tend to favor the Japanese yen, which is widely viewed as a defensive asset during periods of heightened geopolitical stress. While this dynamic has not yet triggered a sharp yen rally, it adds to the downside risks for EUR/JPY should global tensions intensify further.

From a technical perspective, the outlook has deteriorated. After an extended bullish run, EUR/JPY formed a rising wedge pattern, a classic signal of weakening upside momentum. The pair has now broken decisively below the wedge support, confirming a short-term bearish correction and suggesting that sellers are beginning to regain control.

The breakdown also coincides with a violation of an ascending trendline on the hourly time frame, strengthening the bearish case. As long as the pair remains below the former wedge structure, downside continuation appears increasingly likely. Key support levels are now seen in the 180.00–177.00 zone, an area that could attract buyers but also represents a meaningful retracement of the prior uptrend.

SELL EURJPY

ENTRY PRICE: 183.150

STOP LOSS: 184.00

TAKE PROFIT: 180.00

Following the U.S. Army Delta Force's Saturday raid on Venezuela and the apprehension of President Nicolás Maduro and his spouse, bilateral tensions between the U.S. and Venezuela have escalated. Bloomberg reports that on Monday, Maduro refused to plead guilty to the U.S. drug trafficking terrorism charges, triggering a significant geopolitical litigation with far-reaching implications. The mounting geopolitical tensions and uncertainty in the region have driven up prices of traditional safe-haven assets such as gold. "The Venezuela situation has evidently rekindled safe-haven demand, but this is occurring amidst concerns over geopolitical stability, energy supply, and monetary policy," stated Alexander Zumpfe, a precious metals trader at Deutsche Helios Metall. The world's largest gold ETF, SPDR Gold Trust, maintained holdings at 1,065.13 tons. In the industry sector, Michael Widmer, head of metal research at Bank of America, noted that 13 major North American gold miners are projected to see a 2% year-over-year decline in 2026 production to 19.2 million ounces, with all-in sustaining costs expected to rise by 3% to approximately US$1,600 per ounce. He emphasized that market expectations for gold output remain overly optimistic. The bank considers gold a crucial hedge within investment portfolios and forecasts the 2026 average price could reach US$4,538 per ounce.

In terms of economic data, S&P Global's weekly report indicates that the U.S. ISM Manufacturing PMI remained at 51.8, signifying ongoing expansion in the manufacturing sector. Conversely, the Institute for Supply Management's Manufacturing PMI declined from 48.2 in November to 47.9 last month, reflecting continued contraction in business activity. These figures did not temper dovish expectations, causing the U.S. dollar to retreat from nearly four-week highs reached on Monday and further supporting the rally in non-yielding gold. Market forecasts suggest the Federal Reserve will cut interest rates in March and potentially implement an additional cut by the end of the year. Such dovish monetary policy outlook has driven gold prices higher. Recent minutes from the Federal Open Market Committee indicate that most Fed officials consider further rate cuts appropriate as long as inflation continues to decline, though there remains divergence over the timing and magnitude of reductions. Lower interest rates may reduce the opportunity cost of holding gold, thereby supporting its price as a non-yielding asset. The upcoming December U.S. employment report, scheduled for release on Friday, will garner significant attention. Markets generally anticipate an increase of 55,000 new jobs and a slight decrease in the unemployment rate to 4.5%. Should the data surpass expectations, it could bolster the dollar in the short term and exert downward pressure on commodity prices denominated in U.S. dollars.

The bullish envelope of the Bollinger Bands in the 1H timeframe is opening upward, with SMAs diverging upwards. Overall, the short-term bullish trend remains intact, with a high probability of testing the 4480 and 4500 levels. However, the upward momentum is beginning to slow, indicating increased resistance overhead. The MACD is forming a death cross, with the MACD line and signal line currently pulling back toward the zero-axis, suggesting an ongoing correction. A breach below the middle Bollinger Band could lead to a corrective move toward the EMA50 or the lower Bollinger Band, at approximately 4416 and 4407, respectively. The RSI stands at 63, indicating the market is in a bullish zone. In the 1D timeframe, the price is rising along the EMA12 and the upper Bollinger Band; however, last week's candlestick pattern exhibits a bearish engulfing within a broader bullish trend. As long as the 4550 resistance level is not broken, a short-term correction toward the EMA50, around 4216, is likely. The RSI's peak behavior shows a downward trend but has not confirmed a top. Meanwhile, with an RSI reading of 64, the price remains in a bullish zone. It is recommended to go short before going long.

Trading Direction: Sell

Entry Price: 4480

Target Price: 4100

Stop Loss: 4600

Support: 4200, 4100, 3800

Resistance: 4530, 4550, 5000

Bitcoin's ongoing uptrend is underpinned by "capital inflow + sentiment recovery" since the start of the year: U.S. and global listed spot Bitcoin ETFs saw significant net inflows on the new year's first trading day. The institutional allocation signal is deemed a reinforcement of long-term demand, directly lifting prices and improving market depth. ETF inflow data shows capital re-entered crypto assets in early January, offering quantifiable buying support for Bitcoin.

Additionally, structural shifts in the derivatives market have amplified the short-term rally: A surge in bullish option positions and short liquidations have triggered multiple rounds of aggressive bullish short-covering, effectively accelerating the short-term price ascent. Market commentary and exchange alerts note recent frequent short squeezes and large-scale bullish option purchases, rapidly turning overhead resistance into support.

On the daily chart, Bitcoin has logged a five-day winning streak since the new year, fueling a surge in overall bullish sentiment. Price-wise, Bitcoin has broken and stabilized above the 90,000 mark, now facing resistance at 95,000. A decisive breakthrough would unlock upside potential toward 99,000–100,000.

Initial downside support lies at 90,000–89,000. A breach of this zone would sharply heighten short-term downside risks, potentially triggering a retest of the 80,000 level.

Trade Direction: Buy

Entry Price: 92100

Target Price: 99500

Stop Loss: 89000

Valid Until: January 20, 2026 23:55:00

Support: 90600/89321

Resistance: 95000/100000

Within the Eurozone, commentary from key policymakers has remained notably sparse, keeping short-term interest rate markets in a neutral holding pattern as no immediate policy shifts are anticipated. Recently, however, Gediminas Šimkus—ECB policymaker and Governor of the Bank of Lithuania—remarked that the balance of risks for both inflation and economic growth has increasingly tilted toward the downside.

These observations follow last month’s decision in which the European Central Bank held its benchmark interest rates steady for the fourth consecutive meeting. The Deposit Facility, Main Refinancing Operations, and Marginal Lending Facility rates remain at 2.00%, 2.15%, and 2.40% respectively, a move that fully aligned with market consensus. In its policy statement, the ECB Governing Council reaffirmed its commitment to the 2% medium-term inflation target via a data-dependent, meeting-by-meeting strategy. During the subsequent press conference, President Christine Lagarde clarified that the Council discussed neither rate hikes nor cuts, emphasizing a cautious stance. She noted that the bank cannot provide explicit forward guidance given the prevailing climate of global trade uncertainty. The upcoming Eurozone economic calendar is particularly dense: HCOB Composite and Services PMIs are due on Tuesday, followed by preliminary Core HICP data on Wednesday. Thursday will shift focus toward Consumer Confidence, Unemployment Rates, the Economic Sentiment Indicator, and the Producer Price Index (PPI).

On the geopolitical front, U.S. military forces captured Venezuelan President Nicolás Maduro and his wife, Cilia Flores, last weekend. Maduro faces serious allegations of drug trafficking and illicit associations with organizations such as the Sinaloa Cartel and the Tren de Aragua—both recently designated as foreign terrorist organizations by the White House. U.S. President Donald Trump has stated that the United States will "temporarily administer" Venezuela during this transition.

Simultaneously, U.S. domestic data reveals ongoing cracks in the industrial sector. The ISM Manufacturing PMI for December 2025 fell to 47.9, missing the 48.3 forecast and marking the tenth consecutive month of contraction. Despite this continued deterioration from November's 48.2, the index remains significantly above the 42.3 threshold historically associated with broader economic contraction.

Providing a central bank perspective, Minneapolis Fed President Neel Kashkari noted that inflation remains uncomfortably high, though he suggested that monetary policy is now approaching a neutral stance. He characterized the current labor market as a "low-hiring, low-firing" environment, indicating limited turnover rather than an outright collapse in employment.

The EUR/USD pair recently staged a modest relief rally after briefly touching the 1.1659 support zone. This upward impulse, however, found immediate resistance at 1.1726, a level that converges precisely with a local descending trendline currently under formation. The bearish reaction observed at this junction suggests that the broader corrective move has not yet concluded. The immediate downside objective returns to 1.1673, and a decisive breach of the 1.1659 local low could catalyze a fresh bearish leg toward deeper support.

From a moving average perspective, the 100-period and 200-period MAs are situated at 1.1734 and 1.1756 respectively. Notably, the 100-period MA is tracking the descending trendline, providing further technical validation for the current downtrend. Meanwhile, the Relative Strength Index (RSI) has climbed to the 62 level. Although it has not yet reached overbought territory, the RSI is notably higher than the levels seen during previous price peaks, creating a subtle bearish divergence. Given these technical conditions, short positions remain favored as the pair continues to respect the prevailing bearish trend.

Trading direction: Sell

Entry price: 1.1713

Target price: 1.1675

Stop loss: 1.1740

Validity: Jan 16, 2025 15:00:00

Geopolitical volatility spiked last weekend following reports that U.S. military forces captured Venezuelan President Nicolás Maduro and his wife, Cilia Flores. Maduro faces grave allegations involving drug trafficking and associations with major cartels, including the Sinaloa Cartel and the Tren de Aragua—both recently designated as foreign terrorist organizations by the White House. U.S. President Donald Trump announced that the U.S. will "temporarily administer" Venezuela. These dramatic events have intensified "risk-on" sentiment in specific currency corridors, driving a rapid appreciation of the British Pound as markets digest the regional implications.

Domestically, the Bank of England (BoE) has signaled that monetary policy will follow a gradual downward trajectory. This follows the December decision to cut the benchmark interest rate by 25 basis points to 3.75%. Market participants are currently pricing in at least one additional rate cut during the first half of the year, though the pace of easing is expected to remain measured. Investors believe this cautious approach is warranted by persistent inflationary pressures in the UK. While Consumer Price Index (CPI) inflation moderated to 3.2% in November from a September peak of 3.8%, it remains significantly above the 2% target, compelling the BoE to maintain a high level of vigilance.

On the Eurozone side, commentary from policymakers has been relatively scarce, leaving short-term rate markets in a neutral stance with no immediate policy shifts anticipated. Recently, ECB policymaker and Governor of the Bank of Lithuania, Gediminas Šimkus, observed that risks to both inflation and economic growth have increasingly tilted to the downside.

These observations come in the wake of last month's decision where the ECB held its key interest rates steady for the fourth consecutive meeting. The Deposit Facility remains at 2.00%, the Main Refinancing Operations rate at 2.15%, and the Marginal Lending Facility at 2.40%—a move perfectly aligned with market consensus. In its policy statement, the ECB Governing Council reaffirmed its commitment to the 2% medium-term inflation target via a data-dependent, meeting-by-meeting strategy.

During the post-meeting press conference, President Christine Lagarde clarified that neither rate hikes nor cuts were discussed, emphasizing that the bank remains cautious and cannot provide explicit forward guidance given the current climate of global trade uncertainty. Looking ahead, the economic calendar for the Eurozone is dense: the HCOB Composite and Services PMIs are due on Tuesday, followed by preliminary Core HICP data on Wednesday. Thursday will shift focus toward Consumer Confidence, Unemployment Rates, the Economic Sentiment Indicator, and the Producer Price Index (PPI).

The EUR/GBP pair has recently experienced significant bearish momentum after a decisive close below the 100-day Moving Average (MA), currently positioned at 0.8721. The price is now gravitating toward the 200-day Moving Average located at 0.8632. This level is of paramount importance as it converges with a long-term ascending trendline. This confluence zone will be the ultimate "make-or-break" area; a successful defense could trigger a sharp rebound, whereas a breakdown would open the door to a much deeper structural correction. The 0.8635 region stands as the primary horizontal support, aligning closely with the 200-day MA.

Furthermore, the Relative Strength Index (RSI) has reached 30.32 on the daily chart, firmly entering oversold territory. Traders are closely monitoring this area for potential long entries as reversal signals begin to accumulate. Notably, a prominent bullish divergence is forming on the RSI. While the price is testing deep support, it has yet to print a lower low relative to the price action seen on May 28th, when the RSI was significantly higher at 36. This suggests that bearish exhaustion is setting in, indicating that the downward force is dissipating and granting bulls a window to reclaim control of the price action.

Trading direction: Buy

Entry price: 0.8635

Target price: 0.8755

Stop loss: 0.8570

Validity: Jan 16, 2026 15:00:00

Safe-haven demand accelerated back into the precious metals market on Monday, with both gold and silver posting notable rebounds at the start of the week. After recently reaching record highs, prices of both metals remain in a phase of consolidation. This resilience reinforces the view that the broader upward trend remains intact, with the potential for fresh record highs later in the first quarter of 2026.

The trigger for the renewed surge in safe-haven demand was news that the United States captured Venezuelan President Nicolás Maduro over the weekend. Saturday’s action marked Washington’s most controversial intervention in the region since the invasion of Panama nearly four decades ago. The symbolic significance of the move has shaken expectations of regional stability, prompting investors to rotate back into assets viewed as protection against geopolitical shocks.

Gold is now facing increasingly intense volatility and speculative risk. Market participants note that as weekly price swings widen and implied lease rates rise, gold’s implied volatility has been quietly climbing.

The unprecedented turbulence seen across gold and other precious metals during the first trading week of 2026 serves as an important warning signal of heightened speculative activity. Driven by continued accumulation of physical bullion, retail investors have aggressively poured into gold and precious metals products, which may exacerbate liquidity tightness around the year-end and start of the new year. We maintain our upward revision to the gold price outlook and expect gold to reach 5000 USD per ounce as early as the end of the first quarter of 2026.

From a technical perspective, gold’s recent pullback from 4549 was slightly larger than expected, nearly touching 4273, which represents the 50% retracement of the move from 3997 to 4549. However, prices continue to find solid support above the 55-day moving average, currently located at 4172, keeping the long-term uptrend intact.

Once the current consolidation phase concludes, the long-term upward trend is expected to reassert itself. A decisive break above 4549 could open the way toward the 4685 area, near the 61.8% retracement of the 3997–4381 range. However, bearish divergence on the daily MACD suggests that strong resistance may emerge near this zone, potentially limiting the magnitude of the initial upside attempt.

From a short-term trading perspective, the preferred approach remains selling rallies and buying dips.

Trade Direction: Sell

Entry Price: 4470

Target Price: 4300

Stop Loss: 4532

Valid Until: January 20, 2026 23:55:00

Support: 4403 / 4375 / 4331

Resistance: 4472 / 4499 / 4527