The U.S. dollar strengthened against the Canadian dollar on Thursday, as robust economic indicators from the United States combined with a decline in oil prices to support the Greenback, pushing the USD/CAD pair higher toward its monthly peaks. The pair rose over 0.2% in early European trading, extending its recovery from weekly lows around 1.3850 to breach the 1.3900 mark, inching closer to the 1.3920 monthly high.

The uptick in the USD/CAD comes after a series of encouraging U.S. economic releases on Wednesday, reinforcing expectations that the Federal Reserve is likely to maintain its current monetary policy stance in the near term. Producer Price Index (PPI) data for November showed inflationary pressures firming rather than easing. Headline PPI rose 3% year-on-year, exceeding the prior month’s 2.8% and defying market expectations of a slowdown to 2.7%. Core PPI, which strips out volatile food and energy prices, mirrored the trend, climbing to 3% from 2.9%, compared with the consensus forecast of 2.7%.

Adding to the bullish sentiment for the U.S. dollar, Retail Sales figures from the Census Bureau showed a robust 0.6% rebound in November, following a modest 0.1% decline in October. This performance surpassed market expectations of a 0.4% increase and highlighted resilient consumer demand, which has remained a key pillar supporting the U.S. economy despite moderating inflationary pressures reflected in the Consumer Price Index (CPI) data earlier in the week. Analysts noted that the combination of accelerating producer prices and strong retail consumption points to a U.S. economy capable of sustaining growth without immediate Fed intervention.

Meanwhile, the Canadian dollar faced additional headwinds as oil prices declined nearly 2% during the session. Reports from U.S. President Donald Trump indicated that repression against protesters in Iran is easing, reducing the likelihood of an immediate military intervention in the region. Market participants interpreted this as a bearish signal for crude oil, given the geopolitical risk premium previously priced into Brent and WTI futures. Since Canada is a major oil exporter, softer energy prices weighed on the loonie, amplifying gains in USD/CAD.

From a technical standpoint, USD/CAD’s rebound is gaining traction. The pair found support near a short-term bullish corrective trendline and traded above the 50-day exponential moving average (EMA50), signaling renewed upward momentum. Relative strength indicators, which had recently approached oversold levels, are now generating positive readings, suggesting further near-term upside. Traders noted that a sustained break above the 1.3920 resistance could open the door for additional gains toward the next key technical barrier near 1.4000.

BUY USDCAD

ENTRY PRICE: 1.3900

STOP LOSS: 1.3800

TAKE PROFIT: 1.4000

The Euro extended its decline against the US Dollar on Thursday, as a fresh batch of upbeat US economic data reinforced the narrative of American exceptionalism and further strengthened the Greenback. The EUR/USD pair remained under sustained pressure throughout the session, struggling to regain traction as investors reassessed the outlook for US monetary policy following signs of continued resilience in the labor market and regional manufacturing activity.

The latest figures from the US Department of Labor showed that Weekly Initial Jobless Claims fell sharply to 198,000 for the week ending January 10, well below market expectations of 215,000. The prior week’s reading was also revised lower to 207,000 from 208,000, underscoring a trend of persistently tight labor conditions. Adding to the upbeat tone, the four-week moving average of initial claims dropped to 205,000, down from a revised 211,500, suggesting that layoffs remain limited despite restrictive monetary policy.

Beyond the labor market, US regional manufacturing surveys delivered a notable upside surprise. The New York Fed’s Empire State Manufacturing Index surged into expansionary territory at 7.7, a dramatic improvement from December’s -3.7 reading. Similarly, the Philadelphia Fed Manufacturing Index jumped to 12.6 from -8.8, signaling improving business conditions across key industrial regions. Together, the data painted a picture of an economy that continues to defy expectations of a sharp slowdown.

Markets reacted swiftly. The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, climbed to above 99.35, marking its strongest level in more than a month and its highest since early December. The Dollar’s advance reflected renewed confidence that the Federal Reserve will have little urgency to ease policy aggressively, particularly while economic momentum and labor-market strength remain intact.

Comments from Federal Reserve officials reinforced that view. Chicago Fed President Austan Goolsbee welcomed the strong data, saying he was “not surprised” by the low jobless claims reading and emphasizing that the US labor market continues to show underlying strength. Goolsbee described overall economic growth as “good” and noted that recent figures point to ongoing labor-market stability. While he reiterated his expectation that the Fed could cut interest rates later this year, he stressed that policymakers need sustained evidence—particularly on inflation—before committing to that path. Importantly, he cautioned that while rates “can still go down a fair amount,” the central bank’s overriding priority remains returning inflation to its 2% target.

In contrast, Atlanta Fed President Raphael Bostic adopted a more hawkish and cautious stance. Bostic warned that inflation remains uncomfortably high and argued that monetary policy must stay restrictive for longer. He projected that inflationary pressures could persist well into 2026, even as economic growth remains resilient. Bostic expects US GDP growth to stay above 2% through 2026, reinforcing the case for a slower and more measured approach to rate cuts than markets had previously anticipated.

For the Euro, the backdrop remains far less supportive. The single currency has struggled to attract buyers amid softer Eurozone growth prospects, fading disinflation momentum, and the growing divergence between the European Central Bank and the Federal Reserve. With US data consistently surprising to the upside and Fed officials pushing back against expectations of rapid easing, EUR/USD remains vulnerable to further downside.

From a technical perspective, the pair has now reached a critical support zone between 1.16151 and 1.16364. This area has acted as a key demand region in recent sessions, but repeated tests have weakened its defensive strength. A decisive break and daily close below this support band would likely confirm a bearish continuation pattern, opening the door to deeper losses.

Bearish Scenario:If EUR/USD breaks and sustains trade below the 1.16151–1.16364 support zone, selling pressure could accelerate as stop-loss orders are triggered and momentum indicators turn decisively negative.Downside Target: 1.14830

SELL EURUSD

ENTRY PPRICE: 1.1610

STOP LOSS: 1.16800

TAKE PROFIT: 1.14830

The UK’s economic output in November exceeded expectations, providing a modest boost to the growth outlook at the end of the year. GDP rose 0.3% MoM, higher than the previously expected flat reading, with the service and manufacturing sectors registering the strongest growth.

Service sector output increased by 0.3% MoM, and manufacturing output climbed 1.1% MoM, offsetting a sharp 1.3% MoM decline in construction activity. Data shows that despite the ongoing slump in the construction sector, growth momentum in consumer and business-oriented industries is improving.

In the three months to November, GDP edged up 0.1%. The service sector grew by 0.2%, while manufacturing output slipped 0.1%, mainly dragged down by weakness in the automotive manufacturing industry. Construction output also fell by 1.1%. On a YoY basis, GDP expanded by 1.3%, driven by a 1.4% growth in the service sector. Manufacturing output rose 0.4% YoY, and construction output grew 0.7% YoY.

Market Watch: The return of UK economic growth in November has lowered the probability of a rate cut by the BoE in February. The 0.3% MoM GDP growth in November has given sufficient confidence to monetary policy committee members who still worry about inflation to hold off on voting for accommodative policies amid the current economic conditions. Current data indicates that the UK economy achieved modest growth in Q4 2025. The easing of uncertainty following the budget announcement may have underpinned December’s growth. However, the return to economic growth may not trigger a sustained recovery. Despite the boost from falling inflation, weak consumer spending and rising tax burdens may translate into more sluggish economic growth in 2026.

GBPUSD held above the 1.3400 level during the European trading session on Thursday, having earlier surged to near 1.3450. The currency pair staged a rally buoyed by upbeat UK economic growth and industrial data, but the upward momentum failed to sustain amid broad-based US dollar strength.

At present, market focus remains glued to fluctuations in the counterpart currency (the US dollar) for further guidance. Although Trump stated that Iran’s "killing spree" has stopped, which may signal a pause in military action against Iran, many of Trump’s policies are moving forward in terms of implementation. Should the US press ahead with strikes against Iran, it would trigger sharp volatility in the US dollar.

GBPUSD is currently stuck in a range-bound trading pattern, with the intraday trend remaining neutral. On the upside, a breakout above 1.3567 may extend the uptrend from the 1.3008 level, with the next target set at the 1.3787 high.

On the downside, a break below 1.3389 could prolong the downtrend from 1.3567. A sustained breach of the MA55 (currently at 1.3375) would signal that the current decline is another leg down in the correction from the 1.3787 peak. In this scenario, GBPUSD may drift further lower toward the 1.3008 support level.

Trade Direction: Buy

Entry Price: 1.3389

Target Price: 1.3787

Stop Loss: 1.3240

Valid Until: 12, February, 2026, 23:55:00

Support: 1.3389/1.3323/1.3249

Resistance Levels: 1.3495/1.3533/1.3569

Gold prices experienced a short-term correction after a recent period of robust appreciation and record-breaking highs, driven by two primary forces.

The first force involves macroeconomic and policy factors: weakening U.S. inflation and employment data, mounting market expectations for future Federal Reserve interest rate cuts, and political shocks threatening the Fed’s independence have collectively created a safe-haven demand and increased uncertainty regarding monetary policy, providing a strong bullish foundation for gold.

The second force pertains to liquidity conditions and technical analysis: substantial long-term gold ETF inflows since late 2023 have solidified the bullish base, while short-term capital has taken profits and rebalanced near record highs. Additionally, news cycles in U.S. trading hours have contributed to a pattern of upward movements followed by retracements, reflecting typical market behavior. The sustained net inflows into ETFs and intraday capital flows remain critical indicators for predicting the continuation of the bullish trend.

In the 4H timeframe, the overall candlestick movement of gold maintains a clear bullish upward trend. While the short-term SMAs are consolidating, the medium- and long-term SMAs remain in a bullish alignment, indicating that the medium- to long-term trend continues to be bullish. Although recent short-term retracement occurred today, prices recovered and closed above the MA20, suggesting a significant reinforcement of the bullish momentum and increasing the likelihood of continued upward movement.

Currently, gold is supported around the 4580 level, with prospects for an ongoing upward trend toward the 4640 resistance level. A break above this resistance could open the path toward the 4700 target zone. Conversely, if gold falls below 4580, a deeper correction is likely, with the initial support level at 4550.

Trading Direction: Buy

Entry Price: 4600.00

Target Price: 4720.00

Stop Loss: 4510.00

Valid Until: January 29, 2026 23:00:00

Support: 4580.00, 4550.00

Resistance: 4700.00, 4728.00

The Bank of Japan (BOJ) recently refrained from signing a joint statement by multiple central banks supporting Federal Reserve Chair Powell, drawing market attention. This decision is widely interpreted as continuing its long-standing tradition of avoiding political and controversial issues, while also being closely tied to Japan's current domestic political environment. Multiple government sources revealed that the BOJ informally sought the government's opinion on whether to sign the statement, but failed to obtain clear support amid time constraints and sensitivity in Japan-U.S. relations. Relevant officials worried that a public stance might trigger unnecessary friction with the U.S. as Japan faces an early general election. Although BOJ Governor Ueda Kazuo has repeatedly emphasized the importance of central bank independence, he has not publicly responded to remarks by the Trump administration attacking the Fed. Analysts noted that this cautious attitude aligns with the BOJ's consistent style and reflects that it is not entirely immune to political influence. Affected by the Japanese government's deep historical involvement in monetary policy, the BOJ is particularly restrained when dealing with overseas political disputes. Former BOJ Policy Board member Takahide Kiuchi believes that in the current environment, maintaining silence externally is seen as the safest option, especially to avoid additional pressure on the Japanese government from the Trump camp. With Prime Minister Takaichi Sanae's trade policies still in effect, the yen's recovery momentum is expected to be limited. Market experts have already priced in expectations of Takaichi Sanae winning the early general election. Takaichi Sanae is expected to announce the election results after dissolving the House of Representatives next week. Her victory will help secure support for her budget proposal, which is expected to include higher spending plans—beneficial for Japanese stocks but unfavorable for the yen.

On the U.S. side, November retail sales rose more than expected, indicating robust growth momentum in the fourth quarter, driven mainly by a rebound in auto sales and increased household spending across multiple sectors. However, economists pointed out that consumption growth shows a clear "K-shaped divergence": high-income groups supported the overall data, while low-income households faced greater pressure from rising prices of necessities like food, closely linked to the Trump administration's comprehensive tariff policies. Meanwhile, the U.S. Producer Price Index (PPI) recovered moderately, with rising energy costs as the main driver. However, companies absorbed some costs by compressing profit margins, curbing further inflation. Financial markets reacted relatively mildly to these data: the dollar failed to extend its previous rally, U.S. Treasury yields retreated, and traders continued to weigh prospects for Fed policy and geopolitical risks. Although the market generally expects the Fed to keep interest rates unchanged in the coming months, political pressure on Powell still casts a shadow over the dollar's outlook. Concerns about potential damage to Fed independence once intensified but have recently eased.

Regarding the daily chart, the Bollinger Bands are expanding upward, the moving averages are diverging higher, and prices are rising strongly along the Bollinger Upper Band. After the golden cross, upward momentum remains intact. Overall, there is a high probability of testing 160 and 162. The RSI stands at 63, with lows gradually rising, indicating investors are predominantly buying. Based on the 4-hour chart, prices fluctuate upward along the Bollinger Upper and Middle Bands, remaining within an upward trend channel. As long as prices fail to break below the Bollinger Middle Band effectively, they are expected to test 160. After forming a death cross, the MACD and signal lines are pulling back toward the 0-axis but remain some distance away, suggesting adjustments are incomplete. Support levels are at 158 and 157.8. The RSI is at 57, placing the market in a wait-and-see zone. Buying at lows is recommended.

Trading direction: Buy

Entry Price: 158.6

Target Price: 162

Stop Loss: 156.5

Support: 157.5/156.5/155

Resistance: 160/161/162

The Swiss Franc continues to find underlying support rooted in shifting expectations regarding the Swiss National Bank (SNB). Swiss inflation edged up to 0.1% year-over-year in December, marking its first acceleration since July. Despite this uptick, the reading remains near the lower boundary of the central bank's 0% to 2% target range. This economic landscape reinforces the consensus that the SNB will likely maintain its policy rate at 0% in the coming sessions, with inflation projected to rise marginally alongside a broader economic recovery.

Simultaneously, major credit rating agencies are keeping a vigilant eye on U.S. institutional stability. Fitch Ratings recently reiterated that the independence of the Federal Reserve is a fundamental pillar supporting the U.S. sovereign credit rating. Similarly, S&P Global Ratings emphasized that the Fed's credibility is a cornerstone of American institutional strength. These high-level declarations serve to maintain a persistent political risk premium embedded within the U.S. Dollar.

Recent labor market data added a layer of complexity as Nonfarm Payrolls (NFP) grew by 50,000, missing the market forecast of 60,000 and decelerating from the previous month’s 56,000. Despite the slower hiring pace, the unemployment rate tightened to 4.4%. Inflationary signals were equally mixed; while the monthly Core PPI stagnated at 0%, the annual figure climbed to 3%, surpassing estimates. On the consumer side, November Retail Sales rose by 0.6% month-over-month, beating the 0.4% projection and rebounding from October’s contraction.

Federal Reserve officials remain divided on the path forward. Atlanta Fed President Raphael Bostic noted that inflation remains far from target, requiring restrictive policy, while Neel Kashkari of Minneapolis highlighted a stabilizing labor market amidst resilient growth. Conversely, Governor Miran and Philadelphia’s Anna Paulson adopted a more dovish tone, with Miran reiterating the need for 150 basis points of easing this year and Paulson suggesting the 2% target could be reached by year-end. Amidst these conflicting views, Chicago Fed President Austan Goolsbee underscored that central bank independence remains the vital key to maintaining price stability.

The USD/CHF pair has been locked in a decisive bullish trend since bottoming at 0.7861 on December 24th. However, this recovery is now approaching its most significant technical challenge to date: a long-term descending trendline originating from November 5th of last year.

This trendline is characterized by a persistent series of "lower highs," indicating a dominant bearish structure on the higher timeframes. The price is currently gravitating toward the 0.8040 zone, where this trendline resistance converges. If the pair exhibits a bearish reaction at this juncture, it would likely signal the start of a healthy correction, as buyers take profits at a major historical pivot.

From a momentum perspective, the Relative Strength Index (RSI) is currently hovering at 53. Being near neutral territory, the indicator suggests there is still room for a final push toward the trendline. This would likely drive the RSI into overbought levels, creating a much more attractive entry point for sellers looking to capitalize on a rejection.

Furthermore, the 100 and 200-period Moving Averages are situated at 0.7938 and 0.7972, respectively. While they are currently trending below the price and supporting the immediate bullish impulse, they would act as primary downside targets and dynamic support zones in the event of a successful corrective reversal from the 0.8040 resistance area.

Trading direction: Sell

Entry price: 0.8040

Target price: 0.7970

Stop loss: 0.8080

Validity: Jan 27, 2026 15:00:00