The euro began the new trading week on the back foot, extending the softness that defined the latter part of last week, as EUR/USD slipped to its weakest levels in nearly a month. At the time of writing, the pair was trading around 1.1690, reflecting sustained US dollar strength and a cautious market mood ahead of a dense calendar of high-impact US economic releases.

The move lower comes against a complex macro backdrop, where geopolitical headlines from Latin America intersect with monetary policy expectations and technical pressures that continue to favor the greenback.

Over the weekend, US forces captured Venezuelan President Nicolás Maduro, an event that has escalated tensions between Washington and Caracas to their highest level in years. Maduro is expected to appear in a US court later on Monday, while US President Donald Trump has openly warned that further military action against Venezuela remains on the table. The White House has framed its actions as part of a broader strategy to curb drug trafficking and force open Venezuela’s oil sector to international — and particularly US — participation.

Despite the dramatic nature of these developments, global financial markets have so far reacted with notable restraint. Asian equity indices started the week firmly in positive territory, and European stock futures are pointing to a mildly higher open. The lack of risk aversion suggests that investors currently view the Venezuela situation as geopolitically contained, with limited near-term spillover into global growth or financial stability.

In foreign exchange markets, however, the dominant narrative remains US dollar strength rather than geopolitical risk. The dollar’s upward momentum, which gathered pace late last week, has carried into Monday, underpinned by resilient US economic data and a recalibration of expectations around Federal Reserve policy.

Recent US releases, including strong home sales figures and better-than-expected Jobless Claims, have reinforced the view that the US economy is slowing only gradually. This data flow has strengthened the Federal Reserve’s argument for a measured and cautious easing cycle, rather than an aggressive pivot toward rate cuts. As a result, US yields have remained relatively supported, keeping the dollar attractive against lower-yielding peers such as the euro.

Attention now turns to the ISM Manufacturing PMI, due later on Monday, which will offer fresh insight into the health of the US industrial sector. While markets expect only modest improvement, any upside surprise could further cement the dollar’s advantage. The true focal point of the week, however, will be December’s Nonfarm Payrolls report on Friday, a release that has the potential to significantly reshape expectations for US monetary policy in early 2026.

For the euro, the broader macro picture remains challenging. Eurozone growth indicators continue to lag their US counterparts, and the European Central Bank has shown increasing sensitivity to downside risks, particularly as tighter financial conditions weigh on manufacturing and investment. This policy divergence — even if subtle — continues to favor EUR/USD downside over the near term.

From a technical perspective, EUR/USD is firmly entrenched in a corrective phase. The pair has extended its pullback from 1.1800 highs to below the 1.1700 handle, carving out fresh four-week lows and reinforcing a bearish short-term structure.

Momentum indicators paint a clear picture of downside pressure. On the four-hour chart, the Relative Strength Index (RSI) is hovering near 30, signaling oversold conditions but also underscoring the strength of the current bearish trend rather than an imminent reversal. Meanwhile, the Moving Average Convergence Divergence (MACD) continues to print red histogram bars, confirming negative momentum and the absence of bullish conviction.

Immediate support has emerged around the 1.1670 region, but price action so far suggests that buyers lack the strength to engineer a meaningful rebound. A decisive break below this level would expose the 50% Fibonacci retracement of the November–December rally at 1.1650, a zone that could offer temporary stabilization.

Below there, downside risks deepen toward the 1.1500 area, where the December 8 and 9 lows converge with the 61.8% Fibonacci retracement of the same upward cycle. A move into that region would mark a more profound technical deterioration and potentially shift the medium-term outlook more decisively in favor of the dollar.

SELL EURUSD

ENTRY PRICE: 1.1660

STOP LOSS: 1.1800

TAKE PROFIT: 1.1500

Gold (XAU/USD) began the first full trading week of 2026 with a pronounced bullish tone, as a sudden and dramatic deterioration in geopolitical conditions reignited demand for safe-haven assets. The precious metal climbed nearly 2% on the day, trading around $4,420, as investors moved swiftly to price in heightened global uncertainty following a major US military intervention in Venezuela.

Over the weekend, the United States launched what it described as a large-scale, coordinated air and ground operation inside Venezuela. The operation culminated in the capture of Venezuelan President Nicolás Maduro and his wife, Cilia Flores, marking one of the most significant foreign interventions in Latin America in decades. US President Donald Trump confirmed the development, stating that Washington would temporarily assume control of the country to oversee a transition of power. “We’re going to run the country until such time as we can do a safe, proper and judicious transition,” Trump told reporters, underscoring the gravity of the unfolding situation.

For financial markets, the implications were immediate. The sharp escalation between Washington and Caracas added a new geopolitical flashpoint to an already fragile global backdrop dominated by the prolonged Russia-Ukraine war. Together, these conflicts have reinforced gold’s role as a store of value at a time when political risk appears to be broadening rather than fading. Prices remain within striking distance of the record high near $4,549, set on December 26, with investor flows clearly favoring defensive positioning.

Beyond geopolitics, monetary policy expectations continue to provide an important tailwind. Markets remain increasingly confident that the Federal Reserve will deliver further policy easing in 2026, following signs of cooling inflation and a gradual loss of momentum in parts of the US labor market. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold, a dynamic that has been central to the metal’s powerful rally over the past year.

Attention now turns to a packed US economic calendar that could shape near-term expectations for Fed policy. Later on Monday, investors will parse the ISM Manufacturing PMI for December, looking for confirmation that factory activity remains under pressure. Tuesday brings the S&P Global Composite and Services PMIs, offering a broader snapshot of business conditions across the US economy. On Wednesday, markets will assess the ISM Services PMI alongside the JOLTS Job Openings report, both key indicators of labor market resilience. Weekly Initial Jobless Claims are due Thursday, before the week culminates with Friday’s closely watched Nonfarm Payrolls report, which could prove decisive in shaping rate-cut expectations.

From a technical perspective, the outlook for XAU/USD remains constructive despite a brief pullback from recent record highs. Buyers have consistently emerged near the $4,300 psychological level, reinforcing it as a key support zone. On the four-hour chart, the Relative Strength Index (RSI) has turned higher and moved back above the 50 mark after briefly dipping toward oversold territory, signaling a recovery in bullish momentum.

That said, not all indicators point to an uninterrupted surge. The Average Directional Index (ADX) continues to trend lower, suggesting that while the broader uptrend remains intact, its immediate strength has softened. This raises the possibility of short-term consolidation as the market digests recent gains and incoming macroeconomic data.

On the topside, initial resistance is located around $4,450. A sustained break above this level would likely pave the way for a renewed test of the all-time high near $4,549, with scope for further upside should geopolitical risks intensify or US data strengthen the case for aggressive Fed easing.

BUY GOLD

ENTRY PRICE: 4405

STOP LOSS: 4300

TAKE PROFIT: 4600

The upside potential of the USD/CAD currency pair may be constrained as the Canadian dollar, linked to commodity prices, could strengthen amid a potential rise in oil prices. However, West Texas Intermediate crude oil has remained stable around US$56.70 per barrel after fluctuations. Market participants are assessing the implications of U.S. strikes on Venezuela, weighing the regional risks to oil supply. Nonetheless, some analysts anticipate limited disruptions from the attack, noting Venezuela's crude production is below 1 million barrels per day, representing less than 1% of global output. Amid ongoing trade uncertainties, Canada's manufacturing sector remains subdued, marking an 11th consecutive month of contraction as of December 2025. Despite a modest uptick in the Purchasing Managers’ Index, it remains well below the expansion threshold. Both output and new orders weakened simultaneously, with the new orders index hitting a three-month low, and corporate procurement activity continuing to contract. Tariff-related uncertainties are a primary concern for businesses, suppressing current production and diminishing expectations for the coming year. Meanwhile, input costs are rising again, prompting firms to attempt to pass through higher prices, which may, in turn, further dampen demand. The Canadian government's stance regarding rapid trade agreements with the U.S. in critical industries remains cautious, with associated issues anticipated to be the focal point of the planned review of the US-Canada-Mexico Agreement (USMCA) in 2026. On a macroeconomic level, the renegotiation of USMCA is regarded as the most significant single risk facing the Canadian economy in 2026. The uncertainty surrounding U.S. policy direction injects volatility into future negotiations; although bilateral trade remains relatively stable at present, this situation is not guaranteed. The limited adjustment capacity in highly integrated sectors such as automotive manufacturing, combined with U.S. initiatives to incentivize reshoring of key industries, could exert increasing pressure on Canada in the future. Concurrently, domestic U.S. political sensitivities around inflation have constrained the scope for further tariff escalations, offering Canada a degree of cautious optimism. Ideally, Canada could sustain a trade position similar to current levels, but such an outcome is highly contingent upon the negotiation process and the political dynamics on both sides.

The Guardian reported on Monday that President Trump issued a warning that Washington might undertake a new military intervention if interim Venezuelan President Delcy Rodríguez fails to meet U.S. demands. He also commented on the Colombian leadership, proposing the framework of the "Colombia Action," criticizing Mexico's sluggish response, and implying that Cuba appears on the brink of collapse. Traders anticipate the Federal Reserve will implement two more interest rate cuts by 2026. The December FOMC minutes indicate that most participants believe further rate reductions could be appropriate if inflation continues to decline. Markets are closely monitoring President Donald Trump's nomination of the new Fed Chair to succeed Jerome Powell, whose term ends in May. This potential appointment could steer monetary policy toward a more accommodative, lower interest rate stance. Fed officials remain cautious about further rate cuts until the impact of previous easing measures on inflation and employment is fully assessed. Current rate levels still exert a degree of restrictive effect, helping to curb inflation, while the labor market has cooled significantly but has yet to show signs of disorder. With inflation gradually easing and economic growth remaining moderate, limited policy adjustments later this year could be appropriate, but decisions must carefully balance inflation management with the avoidance of excessive pressures on employment.

In the 1D timeframe, the price has broken above and stabilized at the EMA12 with a strong bullish candle, indicating a breakout from the short-term downward channel and a potential continuation of the rebound. The MACD has generated a golden cross, with the MACD line and signal line retracing above the zero-axis, currently distant from it, suggesting the rebound process is still underway. The RSI stands at 44, reflecting prevailing bearish market sentiment and implying the downtrend has not yet been confirmed as over. Resistance levels are identified at the EMA50 and EMA200, approximately at 1.385 and 1.389 respectively. In the 4H timeframe, Bollinger Bands are widening upwards, with SMAs diverging positively. After the MACD golden cross, the MACD line and signal line have moved back above the zero-axis, indicating a bullish trend. The price is likely to test near the EMA200 at approximately 1.383. The RSI at 69 signifies a market in bullish momentum. Therefore, it is recommended to go long before going short.

Trading Direction: Buy

Entry Price: 1.376

Target Price: 1.42

Stop Loss: 1.35

Support: 1.36, 1.357, 1.35

Resistance: 1.414, 1.42, 1.44

Lately, the Japanese government and officials have frequently issued their strongest warnings against excessive yen depreciation, explicitly stating they have "discretionary power to take appropriate action" to curb speculation and maintain exchange rate stability. Such statements have heightened market alertness toward intervention, which may increase the divergence between buying and selling interest at key price levels in the short term and lead to greater volatility.

However, whether actual intervention can reverse the trend depends on three more fundamental factors: 1. US–Japan interest rate differential. Rising US Treasury yields can continue to attract capital inflows into the dollar. 2. Domestic policy and debt structure in Japan. Even if the Bank of Japan (BoJ) begins raising rates, the long-term interest differential and foreign investors' overall preference for Japanese assets may not quickly reverse. 3. Market liquidity and positioning concentration. When liquidity is ample and dollar demand is strong, the impact of short-term official yen purchases is often offset by existing opposing positions and interest differentials.

In other words, verbal intervention can suppress extreme volatility and influence speculative sentiment, but if the drivers of interest differentials and capital flows remain unchanged, intervention often struggles to sustain a stronger yen over the longer term.

From a trader's perspective, if Japan only maintains a "tough stance verbally" without consistent large-scale market operations, the market will continue to price USD/JPY based mainly on interest differentials and US Treasury movements. Currently, with US Treasury yields rising marginally and the dollar generally strengthening, absent sustained real-market intervention from Japan or unexpectedly aggressive tightening by the BOJ, it is reasonable for USD/JPY to continue climbing. Verbal warnings instead create opportunities for "range trading" and "buy-on-retreat": official alerts generate short-term selling pressure at key resistance levels, allowing bulls to accumulate positions gradually at lower prices, a favorable setup for steady long positions.

The daily chart indicated a breakout of a triangular consolidation pattern. Recently, USD/JPY has tested 154.60 twice without breaking below it, forming a double-bottom structure that significantly strengthens bullish momentum. The moving average system shows medium- and long-term averages still in a bullish alignment, indicating the overall trend remains upward.

Currently, the short-term resistance level should be 158.00. If the pair breaks strongly above and holds above this level, upside potential will further open up, possibly testing resistance at 158.90 and even reaching the psychological 160.00 mark. On the downside, support lies near 155.50, and USD/JPY could retest support at 154.60 after breaking this level.

Trading direction: Buy

Entry price: 157.00

Target price: 160.10

Stop loss: 156.20

Valid Until: January 19, 2026, 23:00:00

Support: 156.50/154.60

Resistance: 158.00/160.00

From late 2025 to early 2026, major global economies will face multiple pressures and uncertainties simultaneously in monetary policy, exchange rate trends, and geopolitics. In Japan, persistent yen weakness has triggered public concern among businesses about government policy. Leaders of Japan's two main business lobbying groups told domestic media that while yen depreciation benefits exporters' profits in the short term, it also raises import costs and increases the burden on households and businesses, especially small and medium-sized enterprises reliant on imported raw materials. Regarding overall national strength and long-term development, a stronger yen is more advantageous. Although the BoJ raised rates twice in 2025, the yen failed to benefit significantly from U.S. dollar weakness. Recent inflationary pressure caused by yen depreciation prompted the BoJ to persuade the cautious government to hike rates again last month, but uncertainty about the pace of further tightening limits the yen's recovery potential. At year-end, the yen traded around 157 per dollar, close to the level at which authorities previously signaled support for the currency, raising market expectations of possible renewed foreign exchange intervention. The last time Japan intervened in the FX market was July 2024, when the yen hit a 38-year low.

Within the Federal Reserve, there is caution about further easing. Philadelphia Fed President Anna Paulson stated that before assessing the impact of previous rate cuts, the next cut may still need to wait. She expects inflation to continue moderating, economic growth to remain moderate, and the labor market to have cooled somewhat, but without clear signs of disorder. Against this backdrop, a modest adjustment to interest rates later this year is possible, but the current federal funds rate remains slightly restrictive, helping to keep inflationary pressures contained. In 2025, the Fed cut rates three times by 25 basis points each, lowering the target range to 3.5%–3.75%, and chose to hold steady at the December meeting. Policymakers must balance controlling inflation with supporting employment, while also facing political pressure for more aggressive cuts. Although Fed forecasts suggest room for further easing, guidance on specific timing remains limited. Meanwhile, geopolitical events add new uncertainty to global markets. The U.S. arrest of Venezuelan President Nicolás Maduro prompted investors to reassess regional stability and the international order. This move is seen as the most direct U.S. intervention in Latin America in decades and could heighten risk-aversion in the short term, impacting market sentiment and asset prices. Although markets were closed when the event occurred, global financial markets started the new year strongly, continuing the upward trend formed at the end of 2025 amid central bank policy adjustments, tariff disputes, and multiple geopolitical risks. Analysts note that if Venezuela's political situation stabilizes, its vast oil resources could gradually be released, increasing global energy supply and supporting economic growth. However, due to long-term mismanagement, aging infrastructure, insufficient investment, and political and security risks, meaningful production recovery in Venezuela will take considerable time and will heavily depend on sustained political stability and large-scale capital inflows.

Based on the daily chart, USD/JPY's Bollinger Bands are narrowing, and moving averages are flattening. On December 19th, 2025, a large bullish candle broke above the Bollinger Upper Band, indicating a return to an uptrend in the short term, with a high probability of testing 158 or 160 again. The MACD and signal lines retraced to the 0 axis and formed a golden cross again, confirming a buy signal. RSI is at 58, with higher lows, suggesting market participants are mainly buying. Support levels are at 156 and 155. From a weekly perspective, the price oscillates upward near the EMA12 and remains within an ascending channel. As long as it does not break below EMA12 effectively, it could challenge 160. The MACD is poised to form a "kiss of the angel" pattern. RSI is at 66, indicating a predominantly bullish market. Buying at lows is recommended.

Trade Direction: Buy

Entry Price: 157

Target Price: 160

Stop Loss: 155

Support: 154.7/153.2/150

Resistance: 158/158.8/160

During the European session on Friday, gold prices extended their gains to around 4396, rising 1.45% on the day and approaching the 4400 level. The advance was mainly supported by expectations of further Fed rate cuts and ongoing safe-haven demand. In addition, investors are awaiting US economic data due later this month to assess the future path of interest rates. Next week’s release of the December US nonfarm payrolls report will be a key focus for markets.

At its December policy meeting, the Fed lowered interest rates by 25 basis points, bringing the federal funds target range to 3.50%–3.75%. Minutes from the Federal Open Market Committee showed that most Fed officials believe further rate cuts would be appropriate if inflation continues to ease, though they remain divided on the timing and magnitude of additional easing. Lower interest rates could reduce the opportunity cost of holding gold, thereby supporting the non-yielding asset.

Nevertheless, gold’s upside may be limited, as traders could lock in profits or rebalance portfolios. We expect that as much as 13% of total open interest in the COMEX precious metals market could be liquidated over the next two weeks, leading to a significant repricing and downward pressure on prices. Post-holiday liquidity conditions may further amplify price volatility.

From a longer-term perspective, bullish views on gold remain dominant among major banks this year, particularly given expectations of further Fed rate cuts and US President Trump’s ongoing reshaping of the Fed’s leadership. The baseline forecast sees gold rising toward 4900, with risks skewed to the upside.

Gold prices posted a strong start on the first trading day of the new year, extending early Asian session gains during European hours and approaching the 4400 level. In fact, this move is better described as a rebound following a sharp sell-off rather than a fresh rally. Such rebounds are unlikely to be sustained in the short term, as the time window is overly crowded and upside momentum is likely to be quickly exhausted. Avoid chasing moves.If the price falls to the bottom, the primary strategy is to buy on dips.

Trade Direction: Buy

Entry Price: 4300

Target Price: 4465

Stop Loss: 4250

Valid Until: January 16, 2026 23:55:00

Support: 4303 / 4274/ 4256

Resistance: 4374 / 4404/ 4414