Bullish Momentum In Play As Sellers Lose Their Grip

Manuel

Forex

Economic

Summary:

The histogram is printing progressively smaller bearish bars, signaling that the sell-side pressure is dissipating.

BUY EURGBP

EXP

TRADING

0.86874

Entry Price

0.87300

0.86400

0.86891 -0.00045 -0.05%

0.0

Pips

Flat

0.86400

Exit Price

0.86874

Entry Price

0.87300

The British Pound (GBP) has entered a phase of technical consolidation, successfully stabilizing the gains achieved during last week’s robust bullish surge. This resilience in the Sterling is primarily catalyzed by a suite of macroeconomic indicators that exceeded consensus expectations, suggesting a firmer economic recovery in the United Kingdom than previously anticipated.

A decisive factor in this shift in sentiment was the private sector performance captured by the S&P Global PMIs. The Composite Index climbed to 53.9 in January, a reading that not only beat market projections but also marked a significant acceleration from the previous month. This optimism was further bolstered by the Office for National Statistics (ONS), which reported a 0.4% rebound in December retail sales, effectively ending a sequence of two consecutive monthly contractions.

With a relatively light economic calendar for the upcoming week, market participants are likely to shift their focus toward global risk management and strategic positioning ahead of the Bank of England (BoE) monetary policy meeting in February. While the BoE’s official communications maintain a roadmap toward gradual easing, the internal rhetoric of the Monetary Policy Committee (MPC) remains defensive. Key members have emphasized the necessity of prudence, noting that robust wage growth and sticky underlying inflation remain structural risks that could delay a more aggressive pivot in interest rates.

In contrast, economic sentiment in Germany remains stagnant at depressed levels, as confirmed by the latest IFO Business Climate Index. The reading held steady at 87.6 in January, missing expectations for a recovery to 88.1. These figures underscore fragile economic momentum within the Eurozone's largest economy, characterized by persistent structural headwinds. Complementing this, the broader Eurozone Services PMI retreated to 51.9, highlighting domestic weakness and prompting European Central Bank (ECB) policymakers to maintain a neutral, data-dependent stance, largely dissipating market hopes for aggressive rate cuts in the near term. Bullish Momentum In Play As Sellers Lose Their Grip_1

Bullish Momentum In Play As Sellers Lose Their Grip_1

Technical Analysis

EUR/GBP is currently navigating a consolidation phase that appears to be reaching an inflection point. The pair has failed to establish a fresh lower low beneath the 0.8644 mark set on January 6th. This inability to extend the bearish sequence suggests that the downward dominance is losing its efficacy.

On the 3-hour chart, the 100 and 200-period Moving Averages are situated at 0.8681 and 0.8694, respectively. Currently, price action is attempting to close decisively above the 100-period MA. If this structural shift is maintained, we could witness a new bullish impulse originating from this support floor.

Our momentum analysis via the MACD further supports this transition. The histogram is printing progressively smaller bearish bars, signaling that the sell-side pressure is dissipating. A bullish crossover of the signal lines appears imminent in the upcoming sessions. Furthermore, we have identified a hidden bullish divergence; the recent bearish histogram expansion was significantly larger than the actual price retracement, suggesting that the bears are exhausted and unable to push prices lower despite the momentum.

This technical confluence favors the bulls taking control of the narrative, with primary upside objectives targeted at the 0.8732 resistance zone. However, traders should remain vigilant: a decisive break below the local low would invalidate this bullish setup and open the door for a bearish continuation.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8686

Target price: 0.8730

Stop loss: 0.8640

Validity: Feb 06, 2026 15:00:00

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:

This confluence of Fibonacci levels and moving average resistance adds significant technical weight to this target.

BUY EURAUD

EXP

TRADING

1.71870

Entry Price

1.74500

1.70500

1.71328 -0.00366 -0.21%

0.0

Pips

Flat

1.70500

Exit Price

1.71870

Entry Price

1.74500

Economic sentiment in Germany remains stagnant at low levels, as confirmed by the latest IFO Business Climate Index. The reading held steady at 87.6 in January, missing market expectations for an improvement to 88.1. While the Current Assessment Index saw a marginal uptick to 85.7, the Expectations Index deteriorated slightly to 89.5. These figures underscore a fragile economic momentum within the Eurozone's largest economy, characterized by persistent structural headwinds.

Complementing this data, Friday’s preliminary Purchasing Managers' Index (PMI) offered a mixed narrative. While the manufacturing sector showed signs of improvement, it remains firmly entrenched in contractionary territory. Conversely, the services sector continues to expand, albeit at a slower pace than anticipated. The broader Eurozone Services PMI retreated to 51.9 in January, missing forecasts and highlighting domestic weakness. In contrast, Germany's services sector outperformed expectations, maintaining its expansionary stance even as manufacturing struggled.

Against this backdrop, European Central Bank (ECB) policymakers maintained a neutral stance during their December deliberations, refraining from discussions on rate adjustments. The governing council emphasized a strictly data-dependent, meeting-by-meeting approach. Market expectations for aggressive rate cuts this year have largely dissipated, fueled by a complex economic landscape and the persistence of service-sector inflation.

Geopolitical tensions also remain a primary driver of market volatility. Despite U.S.-mediated peace negotiations between Russia and Ukraine, the conflict shows no signs of de-escalation. Recent reports indicate a large-scale drone offensive by Russian forces, while Ukrainian strikes targeted a Russian oil refinery in the Krasnodar region, keeping risk premiums elevated across European assets.

Meanwhile, the Australian Dollar is finding support ahead of the highly anticipated Consumer Price Index (CPI) release for Q4 2025. Projections suggest quarterly inflation may accelerate to an annual rate of 3.6%, up from the previous 3.2%. Such a result would reinforce the view that inflationary pressures remain uncomfortably above the Reserve Bank of Australia's (RBA) target. Hotter-than-expected CPI data would likely solidify expectations for a hawkish pivot in the near term. Recent Australian activity indicators support this trend, with PMI surveys showing robust expansion across both manufacturing and services, alongside a notably resilient labor market. Bullish Pivot In EURAUD Opens The Path Toward Key Structural Resistance_1

Bullish Pivot In EURAUD Opens The Path Toward Key Structural Resistance_1

Technical Analysis

The EURAUD pair is currently staging a technical rebound following a sustained bearish trend that bottomed at the 1.7093 level. At this trough, the Relative Strength Index (RSI) hit an extreme reading of 22, signaling deeply oversold conditions and suggesting that the downward momentum had become overextended.

On the 4-hour chart, the 100 and 200-period Moving Averages (MAs) are positioned at 1.7413 and 1.7502, respectively. These averages are currently tracking the broader bearish trend and are expected to act as a significant technical "magnet" for the current recovery.

Our momentum analysis via the MACD provides further confirmation of this corrective shift. The indicator recently completed a bullish crossover from deep within negative territory, accompanied by the histogram turning positive. This development suggests that the path of least resistance in the short term has shifted to the upside.

The primary objective for this bullish recovery is the 1.7454 level, which aligns with the 0.50 Fibonacci retracement of the prior leg down. This confluence of Fibonacci levels and moving average resistance adds significant technical weight to this target. While the broader trend remains bearish, the current setup favors short-term long positions as the pair seeks a mean reversion toward these exposed technical levels.

Trading Recommendations

Trading direction: Buy

Entry price: 1.7182

Target price: 1.7450

Stop loss: 1.7050

Validity: Feb 6, 2026 15:00:00

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

Gold (XAU/USD) surged to a sixth consecutive all-time high on Monday, breaching the psychologically pivotal $5,100/oz level as a potent cocktail of geopolitical friction, aggressive central bank accumulation, and a deeply wounded US Dollar fuels a historic rally.

BUY XAUUSD

Close Time

CLOSED

5100.06

Entry Price

5150.00

5065.00

5264.04 +85.46 +1.65%

350.6

Pips

Loss

5065.00

5064.86

Exit Price

5100.06

Entry Price

5150.00

The gold market is writing a historic chapter, one that underscores a profound shift in global capital sentiment. For the sixth consecutive trading session, the spot price of gold (XAU/USD) has etched a fresh record high, trading firmly above $5,100 per ounce during European hours on Monday. This isn’t merely a breakout; it’s a sustained, multi-front assault on previous paradigms, driven by a structural convergence of safe-haven demand, monetary policy expectations, and a deliberate move away from traditional dollar dominance.

At the core of this relentless ascent lies a rejuvenated flight to safety. Over the weekend, the geopolitical landscape frayed further. While US-brokered talks between Ukraine and Russia concluded in Abu Dhabi without a breakthrough, a more immediate shock to market confidence came from renewed transatlantic strains. Doubts over NATO cohesion, sparked by a short-lived but sharp dispute between the United States and allies over Greenland, have lingering effects. More consequentially, President Donald Trump’s Saturday declaration—a threat to impose 100% tariffs on Canada should it proceed with a trade deal with China—reignited fears of a global trade conflagration. This rhetoric directly fuels what analysts are now dubbing the ‘Sell America’ trade, a broad-based retreat from US financial assets.

“This is a market responding to a hierarchy of fears, and currently, the fear of disruptive, unilateral US policy is trumping all,” notes a senior metals strategist at a European bank. “Gold is the ultimate clean shirt in a dirty laundry basket that now holds trade wars, alliance uncertainty, and aggressive tariff threats.”

The ‘Sell America’ sentiment has manifest most clearly in the currency markets, where the US Dollar Index has plunged to its weakest level since September 2025. A weaker dollar reduces the local-cost barrier for holders of other currencies to purchase gold, creating a powerful mechanical tailwind. However, the dollar’s woes are foundational, extending beyond immediate headlines. The broader de-dollarization trend, a strategic objective for several nations seeking to reduce exposure to US financial leverage, continues unabated. The most visible symptom is the unbroken buying spree from global central banks.

China’s central bank extended its official gold reserve accumulation for a fourteenth straight month in December. They are not alone. The National Bank of Poland, the Reserve Bank of India, and the Central Bank of Brazil have all been significant, active buyers in early 2026, converting foreign reserves into tangible, non-sovereign assets. This isn’t tactical trading; it’s strategic portfolio restructuring on a national scale.

Simultaneously, institutional and retail investors are piling in via exchange-traded funds (ETFs). Global gold-backed ETF holdings skyrocketed by 25% in 2025, with total assets under management now standing at a staggering $558.9 billion. Holdings have swelled from 3,224.2 tonnes in 2024 to 4,025.4 tonnes—a massive inflow of physical metal demand from the financial system.

Beneath these flows lies a powerful interest rate narrative. Markets are pricing in at least two more Federal Reserve rate cuts in 2026, a expectation that eviscerates the dollar’s yield appeal. Gold, a non-yielding asset, thrives in a environment of falling real interest rates. The Fed’s own independence has become a market concern, cited by some analysts as part of the ‘Sell America’ rationale, adding an extra layer of political risk to US assets.

“The rally is being validated from every angle: geopolitics, trade, central bank demand, ETF flows, and a dovish Fed forecast,” observes a portfolio manager specializing in commodities. “The breakout above $5,100 isn't just a technical event; it's a confirmation that all these engines are firing in unison.”

The immediate spotlight now shifts to the Federal Reserve’s two-day Federal Open Market Committee (FOMC) meeting, which concludes on Wednesday. While no change to the policy rate is expected, the accompanying statement and, crucially, Chair Jerome Powell’s press conference will be meticulously dissected for clarity on the pace and depth of the anticipated easing cycle. Any hint of hesitation could temporarily unsettle gold bulls, while a reaffirmation of a dovish path could be the catalyst for the next leg toward $5,200.

In the interim, US Durable Goods Orders data due later Monday may offer short-term volatility, but it is unlikely to derail the dominant thematic currents. The technical posture is overwhelmingly bullish, with each minor dip being aggressively bought. The market’s message is clear: until the geopolitical fog clears, trade tensions abate, or the Fed dramatically alters its course, gold’s path of least resistance remains decisively higher. The era of $5,000 gold is not a spike; it is fast becoming the new foundation.

Technical Analysis

From a technical perspective, Gold (XAUUSD) is consolidating at multi-year highs following a powerful and sustained bullish advance. On the daily chart, prices are digesting gains in a tight range, with the current session trading between a high of 5,093.87 and a low of 5,078.215, and closing marginally higher at 5,091.621 (+0.01%). This price action suggests a period of equilibrium as the market gathers energy for its next directional move.

The broader structure remains unequivocally bullish, characterized by a sequence of higher highs and higher lows. The immediate price action is testing the upper boundary of its recent range. The key near-term support is now established at today’s low of 5,078.215, which coincides with the prior session's consolidation zone. A decisive break below this level would signal a deeper pullback, initially targeting the 5,050.00 – 5,060.00 support zone, where previous swing lows and the rising trendline converge. A sustained move below 5,050.00 would mark a more significant deterioration, exposing the psychologically important 5,000.00 handle and the next major dynamic support near 4,980.00.

On the upside, the immediate resistance is clearly defined at today's high of 5,093.87. A sustained breakout and daily close above this level are crucial to reinvigorating bullish momentum. Such a breakout would confirm the continuation of the uptrend and shift focus decisively toward the next major psychological milestone at 5,150.00, with a clear path open toward the 5,200.00 level. This would likely trigger a fresh wave of momentum and trend-following buying.

Momentum indicators reflect this consolidation phase. The very small daily range and negligible gain indicate a balance between buyers and sellers following the recent ascent. This cooling-off period reduces the risk of an immediate, sharp reversal and is characteristic of a healthy trend that is pausing before its next leg higher. The market is demonstrating strength by refusing to correct significantly, indicating underlying demand.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 5,095

STOP LOSS: 5,065

TAKE PROFIT: 5,150

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

The Euro retreated from a near four-month peak against the U.S. Dollar on Monday, as a cocktail of geopolitical trade threats and subdued European data prompted profit-taking.

BUY EURUSD

Close Time

CLOSED

1.18650

Entry Price

1.20000

1.18000

1.20022 -0.00370 -0.31%

62.7

Pips

Profit

1.18000

1.19277

Exit Price

1.18650

Entry Price

1.20000

Trading floors opened this week with a familiar scent of hesitation, and the currency market’s most liquid pair, the Euro-U.S. Dollar, is reflecting that perfectly. After a spirited rally late last week that catapulted the common currency to heights unseen since September, EUR/USD is moderating, currently trading around 1.1860 and shedding roughly 0.3% on the session. This pullback, while modest, is telling. It suggests that last week’s dramatic Dollar sell-off, triggered by whispers of official intervention in Asia, may have run its initial course, and the market is now reassessing the landscape with a more skeptical eye.

The narrative from Friday was dominated by one startling report from Reuters: The U.S. Federal Reserve had conducted rate checks on USD/JPY. For seasoned FX hands, that’s not a routine inquiry; it’s the financial equivalent of a fire department checking hydrant pressure before a blaze. It is a strong, operational signal that often precedes direct intervention by Japanese authorities to support the ailing Yen. That news acted like a pin in the balloon of speculative Dollar longs. The immediate, knee-jerk reaction was a broad-based Greenback retreat, which provided the crucial tailwind for EUR/USD to breach resistance and touch that four-month high at 1.1875 earlier today.

However, the afterglow of that move has faded quickly. Two primary forces are capping the Euro’s ambitions. First, the risk sentiment tide has turned sour. The culprit? A stark reminder from former U.S. President Donald Trump that the ghosts of volatile trade wars are never fully exorcised. His threat to impose 100% tariffs on Canadian goods if re-elected is more than just campaign rhetoric; it’s a jolt to the system, reintroducing a layer of geopolitical uncertainty that markets had somewhat shelved. This has dampened the animal spirits that typically benefit the Euro as a cyclical currency.

Second, domestic European data provided little inspirational counterweight. The latest German Ifo Business Climate Index, a reliable gauge of Europe’s industrial heartbeat, came in uninspiring. While not a collapse, it lacked the positive momentum needed to convince investors that the Eurozone is decisively outperforming its gloomy forecasts. This left the Euro vulnerable to a pullback without fresh, positive catalysts.

So, where does this leave us? Technically, the failure to achieve a daily close above 1.1875 is a short-term victory for the bears and suggests consolidation is likely. The pair is now digesting the gains of the prior two sessions, holding well within the higher range established last week but lacking the impulsive energy for the next leg up.

Fundamentally, the focus is fragmenting. The European Central Bank’s (ECB) narrative remains one of cautious, data-dependent patience, with speeches today from Governing Council members like Joachim Nagel offering little expectation of policy shifts. The real gravitational pull this week is emanating from Washington D.C.

The U.S. economic calendar today offers November’s Durable Goods Orders, which will provide a snapshot of business investment resilience. But this is merely a prelude. The main event is unequivocally Wednesday’s Federal Reserve monetary policy decision. While no change in rates is anticipated, the updated “dot plot” and Chair Jerome Powell’s press conference will be meticulously dissected for clues on the timing and pace of the 2024 easing cycle. Any hint of pushback against the market’s aggressive rate-cut expectations could provide the Dollar with much-needed sustenance and apply sustained pressure on EUR/USD.

Technical Analysis

From a technical perspective, EURUSD is trading in a tight, consolidative range, reflecting a period of equilibrium following recent directional moves. On the daily chart, price action is confined within a narrow session band, with today's high at 1.18578 and low at 1.18486, resulting in a modest gain of +0.03%. This low-volatility environment suggests a pause as the market awaits a catalyst for the next directional move.

The broader structure on the visible portion of the chart shows EURUSD trading near the upper end of a multi-week consolidation zone, with 1.1860–1.1880 acting as a notable resistance barrier. A sustained break above today’s high of 1.18578, followed by a daily close above the 1.1860 level, would signal a resumption of the underlying bullish bias and open the path toward the next key psychological level at 1.1900. Beyond that, the 1.1950–1.2000 zone would become the primary upside target.

Conversely, the immediate support lies at today’s low of 1.18486. A break below this level would likely trigger a test of the more significant support near 1.1820–1.1830, which aligns with recent swing lows and acts as a floor for the current consolidation phase. A decisive break and close below 1.1820 would indicate a failure of the recent bullish attempt and could accelerate selling toward the 1.1780–1.1800 region, where the 50-period moving average (on a higher timeframe) and prior consolidation lows would offer the next layer of support.

Momentum indicators are neutral in this compressed range. The very narrow daily range and small positive close suggest a balance between buyers and sellers, with neither side gaining decisive control. This type of price action often precedes a volatility expansion and a directional breakout

TRADE RECOMMENDATION

BUY EURUSD

ENTRY PRICE: 1.18650

STOP LOSS: 1.1800

TAKE PROFIT: 1.2000

Risk Warnings and Disclaimers

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Eva Chen

Forex

Summary:

Following the Japanese authorities' reaffirmation of measures to prevent speculative and one-sided fluctuations in the yen, the yen strengthened sharply in the short term, causing GBPJPY to plunge to 209.43. However, data from the Bank of Japan (BoJ)’s accounts have not clearly shown that the authorities have implemented substantive interventions, and the market remains divided on whether "real action" has been taken.

BUY GBPJPY

EXP

TRADING

210.178

Entry Price

216.000

206.600

210.726 -0.009 0.00%

0.0

Pips

Flat

206.600

Exit Price

210.178

Entry Price

216.000

Fundamentals

At the beginning of this week, GBPJPY continued the decline from last week, with an intraday drop of nearly 1%, hitting a low of 209.43. Among major currencies, the yen has shown relative resilience, putting significant selling pressure on GBPJPY. Previously, Japanese Prime Minister Hayashi Sanae warned that if the yen experiences one-sided and excessive depreciation, the government would not rule out the possibility of intervening in the market. According to Reuters, Hayashi Sanae stated over the weekend that "the government will take necessary measures to deal with speculative or very abnormal market fluctuations," but did not disclose specific intervention levels or trigger conditions.

However, data from the BoJ's accounts have not provided clear evidence that the Tokyo authorities carried out the first yen-buying operation since July 2024 last Friday. The current account data published by the central bank on Monday had a small deviation from the forecasts made by currency brokers before the action, making it difficult for the market to determine whether the authorities only conducted a small-scale operation or did not intervene at all. The data show that the current account is expected to decrease by about 630 billion yen on Tuesday due to fiscal factors, higher than the average forecast of a 167 billion yen decline by Central Short-term Capital, Ueda Haruki Short-term Capital, and Tokyo Short-term Capital Research Institute. But this deviation is still significantly lower than the smallest intervention scale since 2022 (about 729 billion yen), further weakening the judgment that "substantive intervention has occurred."

On the domestic policy front, the BoJ maintained the policy interest rate unchanged at 0.75% in the policy meeting last Friday, in line with market expectations, and reiterated the possibility of further interest rate hikes if conditions permit. Looking ahead, the market will closely monitor the latest statements from Japanese officials regarding the fiscal budget and election arrangements. Last week, Prime Minister Hayashi Sanae dissolved the House of Representatives and announced early elections in an attempt to consolidate the ruling foundation, and this political process may also indirectly affect the market's expectations of the yen's policy stance.

Market Overreaction, the Current Decline is Likely to End Soon_1

Technical Analysis

From a technical perspective, GBPJPY has effectively broken below the support level of 210.63, indicating that a short-term peak is likely to have formed near 214.83. The short-term trend remains bearish, with an initial downside target pointing to the MA55 (currently around 208.90). If the price continues to break below this moving average, it would suggest that the medium-term upward trend that started from 184.35 is entering a deeper technical correction, with the downside target pointing to 203.18, the 38.2% retracement level of the 184.35–214.83 range.

However, as long as the key resistance above 214.83 is not re-established, the current decline is more likely to be seen as a phased correction within an upward trend. We tend to believe that if the price stabilizes in the 208.00–209.00 range, there is still room for a rebound, and a real reversal of the bullish structure will need to wait for an effective breakout above 215.91.

Trade Recommendations

Trade Direction: Buy

Entry Price: 208.80

Target Price: 216.00

Stop Loss: 206.60

Valid Until: 21 February, 2026, 23:55:00

Support: 208.90/207.98/206.83

Resistance Levels: 211.64/212.91/214.35

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

The US Dollar has breached a critical psychological threshold against the Swiss Franc, with USD/CHF cratering to approximately 0.7760, a level unseen since September 2011.

SELL USDCHF

Close Time

CLOSED

0.77600

Entry Price

0.76500

0.78050

0.76516 +0.00391 +0.51%

41.3

Pips

Profit

0.76500

0.77187

Exit Price

0.77600

Entry Price

0.78050

The Swiss Franc is eviscerating the US Dollar in a brutal display of safe-haven flight and structural distrust, driving the currency pair to depths not plumbed for over a decade. In a session defined by jittery, speculative flows, the USD/CHF is not merely dipping; it is in a state of accelerated retreat, buckling under the weight of existential concerns about America’s commitment to a strong Dollar policy and the sanctity of its central bank.

The immediate catalyst for Monday’s carnage stems from actionable, albeit opaque, signals from the corridors of power. Confirmed reports from Bloomberg and Reuters that the Federal Reserve Bank of New York conducted “rate checks” with major financial institutions—a procedural inquiry for indicative pricing on the USD/JPY—sent a shockwave through leveraged positions. In the nuanced lexicon of foreign exchange markets, such a move is widely interpreted not as academic curiosity, but as a preparatory drill for potential intervention. The message traders received was stark: the US Treasury, possibly in concert with Japan, is actively contemplating stepping into the market to arrest the Dollar’s strength, specifically against the Yen. This immediately triggered a violent, broad-based unwinding of long-USD bets, as no speculator wishes to be caught on the wrong side of a G7 treasury’s firepower. The contagion from the JPY action spread ruthlessly to other majors, with the CHF a prime beneficiary.

While the intervention chatter provides the spark, the Swiss Franc’s ascent is built on a far more formidable granite foundation. In a note that has resonated powerfully with institutional investors, Goldman Sachs has forcefully argued that the CHF stands as “the best-positioned global FX hedge against central bank subordination risks.” This is a critical evolution of the Franc’s narrative. It is no longer just a refuge during geopolitical strife or equity market meltdowns. In the current epoch, defined by the looming threat of fiscal dominance—where governments pressure central banks to monetize debt, sacrificing inflation control—Switzerland’s institutional framework is a global outlier. Goldman underscores the nation’s resilient fiscal fundamentals, its inherent buffer against imported inflation, and a central bank mandate that remains stubbornly focused on price stability. This makes the CHF a targeted hedge against a very specific, pervasive fear: that other major central banks, including potentially the Fed, may eventually be compelled to prioritize government financing conditions over their inflation-fighting credibility.

Compounding the Dollar’s misery is a domestic political storm clouding the horizon of the Federal Reserve itself. The White House has signaled that President Trump’s nomination for the next Fed Chair—succeeding Jerome Powell—could be unveiled as soon as this week. The list of circulating names, including Kevin Hassett, Rick Rieder, and Kevin Warsh, is being scrutinized not for economic pedigree alone, but for perceived political fealty. The market’s paramount concern is the erosion of the Fed’s hard-won independence. A nominee viewed as excessively aligned with the administration’s growth or, more worryingly, its electoral objectives could fundamentally undermine confidence in the Dollar as a store of value. Investors are pricing in the risk of a central bank that may be slower to hike, or quicker to cut, based on political rather than economic cycles. This fear is actively diluting the Dollar’s yield appeal.

All this unfolds in a critical macro data and policy week. The Federal Open Market Committee (FOMC) concludes its meeting on Wednesday, with the CME FedWatch Tool signaling a near-certainty that rates will be held steady in the 3.50%-3.75% range. This follows an aggressive 75-basis-point cutting cycle in 2025, a response to nascent labor market cracks. The statement and any subsequent communications will be parsed with manic intensity for hints on the balance between remaining inflation concerns and growth risks, and for any language that might address market volatility or currency levels.

Earlier on Monday, the US Durable Goods Orders for November will offer a timely, if secondary, pulse check on business investment sentiment. Yet, in the current environment, even robust data may struggle to provide sustained relief for the embattled Greenback. The tides of political risk and intervention speculation are currently overwhelming traditional fundamental flows.

Technical Analysis

From a technical perspective, USDCHF is exhibiting signs of a bearish correction within a broader downtrend that has persisted since mid-2026. The current session saw price decline to a low of 0.77403 before a modest recovery to 0.77746, leaving the pair down 0.33% on the day. The price action remains confined below the key 0.7800 psychological level, which has transformed from previous support into a new resistance barrier.

On the daily chart, the structure is bearish, with the pair making a series of lower highs and lower lows. The recent breakdown below the 0.7800 handle has opened the path for a test of the current yearly lows near the 0.7740 area. A decisive break and daily close below the session low of 0.77403 would confirm bearish momentum acceleration, with the next significant support target located near the 0.7700 psychological level. Below that, the 0.7650–0.7670 zone, which represents the lows from early 2026, would come into focus.

Should a recovery attempt materialize, any upside is likely to be capped initially by the former support-turned-resistance near 0.7800. A sustained move back above this level would be required to invalidate the immediate bearish bias and shift focus toward the 0.7850–0.7870 zone, where the descending trendline from the 2026 highs converges.

Momentum remains tilted to the downside, with the pair failing to sustain rallies and consistently finding selling pressure near the 0.7800 region. The bearish engulfing nature of recent daily candles suggests sellers remain in control.

TRADE RECOMMENDATION

SELL USDCHF

ENTRY PRICE: 0.77600

STOP LOSS: 0.78050

TAKE PROFIT: 0.7650

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

Recently, market sentiment has shifted to heightened vigilance regarding Japanese government intervention, resulting in sustained depreciation of the USDJPY pair. However, the likelihood of short-term technical correction opportunities is gradually increasing.

BUY USDJPY

Close Time

CLOSED

153.832

Entry Price

156.400

152.800

152.556 +0.370 +0.24%

103.2

Pips

Loss

152.800

152.777

Exit Price

153.832

Entry Price

156.400

Fundamentals

During trading sessions today, the USDJPY exchange rate experienced significant intraday volatility, retreating from recent highs to approximately 154.00, indicating a pronounced strengthening of the Japanese yen. Market sentiment shifted from previous bets on yen depreciation to heightened alertness over potential official intervention by Japanese authorities. Both trading volume and volatility increased markedly, with participants adopting cautious position management ahead of key levels.

The recent persistent appreciation of the yen is primarily driven by the Japanese authorities' more proactive stance toward abnormal exchange rate fluctuations, including public statements about engaging in communication and coordination with U.S. counterparts. Japanese fiscal officials and government representatives are closely monitoring the forex market, explicitly leaving open the possibility of intervention to curb excessive volatility if necessary. Meanwhile, rumors suggest that the U.S. and Japan are exchanging information regarding interest rate checks and market conditions, which some interpret as a prelude to coordinated intervention. Such signals have sufficed to prompt short-term yen long-covering and a coupled response in interest rates and the exchange rate. The overarching logic is: official statements and behind-the-scenes diplomacy lead to a short-term market sentiment reversal and rapid yen appreciation.

This fundamental evolution has a dual impact on market transmission. On one hand, anticipated or enacted policy interventions can significantly curb the short-term appreciation potential of the USDJPY, triggering short covering and weakening the dollar. On the other hand, if interventions are perceived as "conditional and temporary" stabilization measures, market expectations regarding long-term interest rate differentials and macroeconomic fundamentals—such as divergence in monetary policies between the U.S. and Japan—may persist. Consequently, yen appreciation may manifest more as rapid but fleeting adjustments rather than a fundamental shift in the medium-term trend.

Technical Analysis

Panic Selling May Be Coming to an End, with a Technical Rebound Expected in the Short Term_1

In the 1D timeframe, the USDJPY currency pair temporarily broke below the 154.00 psychological support level and tested the 153.60 support zone. Intraday price action indicates the pair found temporary support above this level, leading to a gradual slowdown in the decline. Meanwhile, the RSI indicator signals that the market has entered oversold territory, increasing the likelihood of a technical rebound in the short term.

Currently, if the USDJPY breaks below the 153.60 support, the exchange rate may further test the 153.00 support level. Conversely, if the price stabilizes and finds support at this level, it could attempt to recover the gap created by today's gap-down opening and resume a bullish trend.