USDJPY Stretched Near 159

Forex

Economic

Summary:

USDJPY pushed into the high-158s as the yen stayed under pressure from Japan’s election/fiscal-stimulus speculation and a sharp jump in JGB yields, while traders also positioned around near-term US macro event risk...

SELL USDJPY

EXP

PENDING

158.850

Entry Price

158.200

159.200

159.362 +0.204 +0.13%

Pips

PENDING

158.200

Exit Price

158.850

Entry Price

159.200

Overview

USDJPY is trading around the upper-158 area today, with the day’s range showing an open near 158.09, a high near 158.91 and a low near 157.88 (latest daily snapshot).

The macro mix is unusual because Japan is generating its own yield shock: Reuters reports Japan’s equity rally and snap-election chatter have weakened the yen and driven long-end JGB yields to multi-decade highs, with the 10-year yield around 2.15–2.17%.

That matters for USDJPY in two opposing ways that traders often miss: higher JGB yields can slow capital outflows (a yen-supportive channel), but when the move is interpreted as “more fiscal stimulus / looser stance for longer,” it can still net out as yen-negative via risk-on and carry behavior. In parallel, US rates remain elevated (10Y around the low-4% area recently), keeping the rate differential structurally supportive for USDJPY, but the key is whether today’s incremental information changes expectations at the margin rather than the level itself.

Market sentiment

Risk appetite looks positive in Asia (Nikkei at record highs per Reuters), which typically encourages short-yen positioning, yet the more important sentiment variable for this specific setup is “crowding plus policy risk.”

Volatility in US equities is not screaming panic (VIX around 16 on Jan 12), so this isn’t a classic flight-to-safety yen bid environment. The real sentiment tell is that yen weakness is becoming headline-level and politically sensitive; when a currency move becomes a domestic political topic, the distribution of outcomes changes because verbal intervention, liquidity shocks, and sudden position squaring become more likely than normal. That asymmetry is why a short-term mean-reversion SELL can be higher quality than chasing the trend at stretched intraday levels, even if the broader story still leans USDJPY-bullish.

Technical analysis

On the M15 timeframe, the trade idea is not “the trend is dead,” it’s “price is temporarily paying too much for the trend.” After the spike into the high-158s, the Bollinger Bands typically widen, and the highest-probability entry is when price stops riding the upper band and prints a decisive M15 close back inside the band, signaling volatility exhaustion rather than trend continuation.

With Ichimoku (9,26,52), the clue is usually the distance between price and the fast lines: when price is extended above the cloud and the Tenkan-Kijun gap balloons, continuation requires fresh impulse; without it, the market often snaps back toward Tenkan/Kijun as “fair value” on intraday horizons. Stoch (5,3,3) complements this by identifying the timing: you want to see Stoch roll over from overbought and cross down while price fails to make meaningful new highs, which is a classic micro-divergence that often precedes a 30–90 minute pullback rather than a full reversal.

In plain terms: don’t sell strength just because it’s strong; sell only when the M15 structure shows buyers are no longer being rewarded for paying higher.

Trade recommendation

Entry: 158.70–158.85

Take Profit: 158.20

Stop Loss: 159.20

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

GBP/JPY trades near 17-year highs as Japan’s political uncertainty and rising bond yields deepen Yen weakness, while bullish technical signals point to further upside toward 214.90.

BUY GBPJPY

EXP

TRADING

214.001

Entry Price

214.900

213.500

213.918 +0.321 +0.15%

0.0

Pips

Flat

213.500

Exit Price

214.001

Entry Price

214.900

The British Pound strengthened further against the Japanese Yen on Tuesday, extending a powerful rally that has carried the GBP/JPY exchange rate to levels last seen during the global financial crisis era of 2008. At the time of writing, the pair was trading near 213.82, up roughly 0.40% on the session, underscoring a widening divergence between a resilient Pound and a Yen increasingly weighed down by political and fiscal uncertainty in Japan.

The move has been driven primarily by renewed, broad-based weakness in the Japanese currency following reports that Prime Minister Sanae Takaichi is considering dissolving the lower house of parliament and calling a snap general election as early as February. The prospect of an early vote has unsettled investors, reviving concerns over fiscal discipline and heightening expectations of pre-election spending measures at a time when Japan already carries one of the largest public debt burdens in the developed world.

Markets have responded swiftly to the political headlines. Expectations of looser fiscal policy and heavier government borrowing have pushed Japanese Government Bond (JGB) yields sharply higher, with the benchmark 10-year yield climbing to around 2.166%, its highest level in 27 years. The surge in yields reflects growing unease over Japan’s debt sustainability and the potential strain on public finances should political instability translate into aggressive stimulus.

This dynamic is further complicating the Bank of Japan’s (BoJ) policy outlook. While the central bank has been attempting to carefully normalize policy after years of ultra-loose monetary conditions, rising political risk and fiscal uncertainty may force policymakers to proceed more cautiously. Higher yields driven by fiscal fears rather than economic strength are unlikely to provide meaningful support to the Yen, particularly if the BoJ delays further rate hikes to avoid destabilizing financial markets.

In the foreign exchange space, the result has been another wave of Yen selling across the board. USD/JPY remains near one-and-a-half-year highs, while the Yen has slid to fresh all-time lows against both the Euro and the Swiss Franc. The speed and breadth of the move have once again revived speculation around potential currency intervention, even as Japanese officials continue to issue verbal warnings against excessive and disorderly FX movements. However, with yield differentials still moving against Japan and political risk rising, traders appear reluctant to fade the trend.

Japan’s economic calendar offers little in the way of near-term relief. With data releases thin, market attention remains firmly fixed on political developments and capital flows. The next focal point will be Thursday’s Producer Price Index (PPI), though its impact may be limited unless it materially alters inflation expectations.

On the UK side, domestic data has been mixed but has done little to derail Sterling’s momentum. Retail Sales growth slowed toward the end of 2025, according to figures from the British Retail Consortium, which showed like-for-like sales rising 1.0% year-on-year in December—the weakest pace in seven months. While the reading exceeded market expectations of a 0.6% increase, it marked a modest slowdown from November’s 1.2% gain, reinforcing the view that consumer demand remains under pressure from high interest rates and cost-of-living challenges.

Looking ahead, investor focus will shift to a heavy slate of UK economic data on Thursday, with monthly GDP figures taking center stage. Stronger-than-expected growth could reinforce expectations that the UK economy is weathering restrictive monetary conditions better than feared, offering further support to the Pound—particularly against low-yielding currencies such as the Yen.

Technical Analysis

From a technical perspective, GBP/JPY continues to exhibit strong bullish characteristics. The pair staged an aggressive rally during the European session, maintaining stability within an ascending bullish channel and establishing firm support near the 212.75 level. This area now acts as a key technical floor following the pair’s successful break above prior resistance zones.

Momentum indicators remain supportive of further upside, reflecting sustained buying pressure and trend continuation signals. Notably, the pair has cleared the 2.00% Fibonacci extension level at 214.15, a development that opens the door toward the next major upside target near 214.90, which coincides with the upper boundary of the bullish channel.

As long as prices remain above the 212.70 support zone, the broader technical outlook remains constructive. Any short-term pullbacks are likely to be viewed as corrective rather than trend-reversing, particularly amid ongoing fundamental weakness in the Yen.

TRADE RECOMMENDATION

BUY GBPJPY

ENTRY PRICE: 214.00

STOP LOSS: 213.50

TAKE PROFIT: 214.90

Risk Warnings and Disclaimers

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Eva Chen

Forex

Summary:

The USDJPY continued to strengthen in Tuesday trading, hovering near its highest level since July 2024. Japanese Prime Minister Takaichi Sanae may soon call an early election, leveraging her high approval ratings, which has boosted market expectations for further expansionary fiscal policies. (Negative for the yen)

SELL USDJPY

EXP

PENDING

160.200

Entry Price

153.910

162.500

159.362 +0.204 +0.13%

Pips

PENDING

153.910

Exit Price

160.200

Entry Price

162.500

Fundamentals

The USDJPY rose again on Tuesday, climbing to 159.00, propelled by the yen's accelerating depreciation. The yen's continued weakening has become a focal point for the market, reflecting both Japan's unique political risks and broader institutional unease centered on the U.S.

The yen's decline stemmed from widespread reports that Japanese Prime Minister Takaichi Sanae plans to dissolve the House of Representatives when the regular Diet session opens on January 23, paving the way for an early general election. Reports indicate this decision has been communicated to senior members of the ruling Liberal Democratic Party.

Since taking office nearly three months ago, the Takaichi Sanae Cabinet has maintained consistently high approval ratings. The market views this as a calculated gamble to stabilize its fragile governing position. With the ruling coalition holding only a slim majority in the House of Representatives, the momentum to seek re-election has intensified while political conditions remain favorable.

If the House of Representatives is dissolved on January 23, the official campaign period could begin as early as January 27 or February 3, with voting expected to take place on February 8 or February 15. Holding the election early would enable Takaichi Sanae to implement her expansive fiscal spending plan.

Beyond domestic economic matters, re-election would also bolster Takaichi Sanae's influence in foreign policy. Her recent remarks in the Diet regarding Japan's potential response to the Taiwan situation have further strained Sino-Japanese relations, and winning the election would give her greater confidence to tackle diplomatic challenges.

Meanwhile, as market confidence in the U.S. dollar waned, safe-haven demand also bolstered the yen. The Trump administration's threat to pursue criminal charges against Federal Reserve Chairman Jerome Powell sparked concerns about the enduring credibility of U.S. institutions, prompting some defensive capital flows into the yen and adding a layer of caution to the market.

Yen's Vulnerability Reactivated Amid Japan's Political Maneuvering_1

Technical Analysis

From a technical perspective, the USDJPY has staged a strong rebound this week, breaking above 159.00 with an upward bias in intraday trading. A sustained move above this level could test the 200% Fibonacci retracement at 161.95, which corresponds to the July 3, 2024 high within the 145.47-150.90 range.

Before the market tests this peak, a significant pullback will occur at point D. Exercise caution when chasing highs, and focus on swing trading. Overall, as long as the support level at 152.82 holds, the outlook remains bullish even if a pullback occurs.

Trading Recommendations

Trading Direction: Sell

Entry Price: 160.20

Target Price: 153.91

Stop Loss: 162.50

Valid Until: February 10, 2026 23:55:00

Support: 158.18, 156.10, 154.33

Resistance: 160.21, 160.50, 161.95

Risk Warnings and Disclaimers

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Alan

Commodity

Summary:

Gold has extended its rally on U.S. domestic political developments, slicing through USD 4,600 and clearing the way for a measured technical extension higher.

BUY XAUUSD

EXP

TRADING

4595.39

Entry Price

4720.00

4510.00

4617.27 +31.17 +0.68%

0.0

Pips

Flat

4510.00

Exit Price

4595.39

Entry Price

4720.00

Fundamentals

The immediate catalyst is a sudden market reassessment of Fed independence—news that the U.S. Department of Justice has opened an investigation into the Fed Chair triggered fears of monetary-policy politicization, broad-based dollar weakness and a flight-to-quality bid in bullion. Sell-side desks and proprietary-trading books now price in a higher systemic-risk premium. Political/institutional shocks of this magnitude typically generate an acute spike in precious-metal demand.

ETF flows remain supportive: holdings and net creations have stayed at cycle highs since end-2025, converting a headline-driven spike into a more durable uptrend should inflows persist.

Macro tailwinds reinforce the narrative. Falling real U.S. Treasury yields and a declining DXY reduce the opportunity cost of holding non-interest-bearing gold, lifting both physical uptake and derivatives positioning. Concurrently, risk-off asset allocation has pushed hedge funds and family offices to raise their strategic weight to metals, amplifying short-term buy-flow intensity.

Overall, the fundamental backdrop is a bullish convergence of "event-driven catalyst + supportive liquidity".

Technical Analysis

Upside Breakout Opens, Gold Targets 4728_1

On the daily chart the prevailing structure is a strong, well-sequenced uptrend. The moving-average stack remains bullishly aligned (MAs in perfect ascending order), underscoring trend persistence.

Monday's close above the 4,550 resistance invalidates the prior range and opens the 0.786 Fibonacci extension at 4,728.50 as the next upside objective.

Traders are recommended to use the 1-hour and 4-hour MA10/MA20 as dynamic support, and to adopt a buy-the-dip stance with a bullish bias.

Trade Recommendations

Trade Direction: Buy

Entry Price: 4580.00

Target Price: 4720.00

Stop Loss: 4510.00

Valid Until: 27, January, 2026, 23:00:00

Support: 4570.00/4550.00

Resistance Levels: 4700.00/4728.00

Risk Warnings and Disclaimers

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Tank

Forex

Commodity

Summary:

Influenced by uncertainties and geopolitical risks, gold prices retreated after hitting a historic high of $4,630 per ounce in the previous trading session, then continued their upward trend. The U.S. December Consumer Price Index (CPI) inflation data, to be released later on Tuesday, will be the market's focus.

SELL XAUUSD

EXP

TRADING

4582.97

Entry Price

4300.00

4700.00

4617.27 +31.17 +0.68%

0.0

Pips

Flat

4300.00

Exit Price

4582.97

Entry Price

4700.00

Fundamentals

Tensions between Iran and the United States may boost prices of traditional safe-haven assets like gold. U.S. President Trump threatened retaliation if Iranian authorities target civilians, while Tehran warned the U.S. and Israel against any intervention. On Monday, Trump announced that any country trading with Iran will face a 25% tariff on all its trade with the U.S. Traders are closely watching the U.S. CPI data due on Tuesday, with both overall and core CPI for December expected to rise 2.7% year-on-year. Any sign of rising U.S. inflation could strengthen the dollar and pressure dollar-denominated commodity prices in the short term. Holdings of SPDR Gold Trust, the world's largest gold ETF, increased by 6.24 tons from the previous day to 1,070.8 tons. Meanwhile, CME Group announced that starting after the close on January 13th, it will adjust margin calculation methods for precious metals futures (including gold and silver), shifting from fixed amounts to a percentage of contract notional value, approximately 5% for gold contracts and 9% for silver. This adjustment may affect leverage costs for some investors but also reflects the exchange's management of market volatility expectations.

During a speech on Sunday, Federal Reserve Chair Jerome Powell said he is under criminal investigation, sparking an independence crisis and triggering risk-off sentiment in global markets. Powell stated that the U.S. Department of Justice has issued a grand jury subpoena to the Fed and threatened criminal charges over his June 2025 testimony to the Senate Banking Committee regarding the $2.5 billion renovation of the Fed's Washington, D.C. headquarters. He called these threats "pretexts" aimed at pressuring the Fed to cut interest rates. Market concerns suggest that if the Fed's independence erodes, it could weaken its credibility in fighting inflation, potentially pushing long-term inflation expectations higher and structurally pressuring the dollar's value. In turn, this outlook has failed to attract meaningful buyers for the dollar, further supporting gold prices. However, gold bulls are waiting for the latest U.S. consumer inflation data. The closely watched U.S. nonfarm payrolls report released last Friday supported the view that policy may remain on hold in the first quarter. Yet traders still expect the Fed to cut rates twice later this year.

Technical Analysis

Regarding the 4-hour chart, gold's Bollinger Bands are opening upwards, with moving averages diverging upward. After breaking above the Bollinger Upper Band, prices faced resistance and may pull back to around the EMA12 and Bollinger Middle Band at 4,562 and 4,503, respectively. If they stabilize, there is a high probability of another breakout above 4,630 and 4,650. RSI is at 72, indicating a dominant buy-side market. Meanwhile, the daily chart indicates that prices are oscillating upward along the Bollinger Upper Band and EMA12. MACD momentum weakens somewhat, but as long as prices do not fall below EMA12, the uptrend remains intact. Resistance lies near previous highs and round numbers at approximately 4,630 and 4,700. RSI is at 69, reflecting strong buying sentiment. It is better to sell now and buy later.

Crossing Above 4600! Gold Retreats but Still Has New Highs Ahead_1

Crossing Above 4600! Gold Retreats but Still Has New Highs Ahead_2

Trading Recommendations

Trade Direction: Sell

Entry Price: 4581

Target Price: 4300

Stop Loss: 4700

Support: 4500/4200/4100

Resistance: 4630/4650/5000

Risk Warnings and Disclaimers

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Manuel

Forex

Economic

Summary:

This suggests that the recent bearish correction is rapidly losing velocity, potentially allowing buyers to reclaim control of the price action.

BUY USDCHF

EXP

PENDING

0.79650

Entry Price

0.80760

0.79400

0.80158 +0.00068 +0.08%

Pips

PENDING

0.79400

Exit Price

0.79650

Entry Price

0.80760

Geopolitical tensions have intensified as U.S. President Donald Trump issued a stern warning, stating that the United States would respond with decisive force should Iranian authorities employ lethal measures against protesters. This rhetoric was further amplified by the administration's announcement that any nation engaging in trade with Iran will face an immediate 25% tariff on all business conducted with the United States. These developments have injected a significant layer of risk-off sentiment into global markets as investors weigh the potential for trade disruptions.

On the domestic front, a recent New York Times headline revealed that federal prosecutors have allegedly initiated an investigation into Federal Reserve Chair Jerome Powell. In a direct response, Powell released a video statement clarifying that these legal threats are unrelated to his past congressional testimonies or administrative duties. Instead, he characterized the allegations as "pretexts" from the Trump administration, asserting that the prospect of criminal charges is a direct result of the Federal Reserve maintaining its independence and setting interest rates based on economic data rather than political preference.

Regarding economic indicators, the U.S. Bureau of Labor Statistics reported that Nonfarm Payrolls added 50,000 jobs in December, missing the 60,000 forecast. However, the Unemployment Rate unexpectedly declined to 4.4% from 4.6%, tempering fears of a major labor market contraction. Simultaneously, the University of Michigan Consumer Sentiment Index rose to 54 in January, exceeding expectations. Nevertheless, the Fed remains concerned about inflation expectations, which ticked up to 3.4% on a five-year horizon, signaling that the fight against price pressures remains a priority.

In Switzerland, the latest inflation figures have provided the Swiss National Bank (SNB) with breathing room. The Consumer Price Index (CPI) remained unchanged month-over-month in December, a recovery from the previous contraction. On an annual basis, inflation stands at 0.1%, aligning with central bank projections. SNB meeting minutes confirm a cautious stance, with officials seeing no immediate necessity to shift interest rates into negative territory, citing potential risks to the financial system while noting a gradual improvement in the broader economic outlook. Bulls Eye Strategic Rebound From Key Horizontal Support Confluence_1

Bulls Eye Strategic Rebound From Key Horizontal Support Confluence_1

Technical Analysis

The USD/CHF pair continues to trade within a dominant bullish structure. After reaching a local peak of 0.8017 in the previous session, the pair entered a corrective phase, descending toward the 0.7955 region. This zone is strategically significant as it lies in close proximity to the 100-period Moving Average, currently positioned at 0.7948.

This area is expected to serve as a technical "launchpad" for the next leg up. The current floor coincides with a historical resistance-turned-support level; if the price confirms this S/R flip, it would provide a strong technical foundation for a renewed upward impulse.

From a momentum perspective, the Relative Strength Index (RSI) has dipped to a local low of 36, nearing oversold territory. Notably, this is the lowest RSI reading within the current bullish cycle, creating visible bullish divergences as the indicator shows exhaustion even against higher price levels. This suggests that the recent bearish correction is rapidly losing velocity, potentially allowing buyers to reclaim control of the price action.

The primary upside objective for this anticipated move is the 0.8075 resistance zone, a significant local ceiling. However, traders should remain vigilant: a failure to hold the 0.7948 support would invalidate the immediate bullish setup and likely lead to a deeper retracement toward the next major demand zone.

Trading Recommendations

Trading direction: Buy

Entry price: 0.7965

Target price: 0.8076

Stop loss: 0.7940

Validity: Jan 23, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Forex

Economic

Summary:

A significant technical shift has occurred as the 200-period Moving Average, which previously functioned as a reliable support floor, is now acting as a resistance ceiling.

SELL EURUSD

EXP

TRADING

1.16643

Entry Price

1.16050

1.17050

1.16378 -0.00041 -0.04%

0.0

Pips

Flat

1.16050

Exit Price

1.16643

Entry Price

1.17050

Economic sentiment within the Eurozone has shown notable signs of recovery, according to the latest Sentix Investor Confidence Index, which improved to -1.8 in January from -6.2 in December. This represents the strongest performance since July of last year and highlights a significant shift in institutional investor optimism regarding the region's economic trajectory. Although this data underscores a renewed sense of confidence, its immediate impact on the Euro's exchange rate has remained relatively contained.

Eurozone inflation has stabilized near the European Central Bank (ECB) target, reinforcing the prevailing consensus among policymakers that interest rates should remain at their current levels unless the economic outlook shifts dramatically. ECB Vice President Luis de Guindos stated on Thursday that current rates are appropriate, though he cautioned that "enormous uncertainty" persists due to heightened geopolitical risks. Supporting this cautious optimism, consumer consumption rose by 0.2% month-over-month in November, surpassing estimates. Conversely, German economic data remains mixed; while Industrial Production exceeded forecasts, the trade balance narrowed as exports experienced a decline.

In the United States, the political landscape has become increasingly volatile. A headline in the New York Times recently reported that federal prosecutors have allegedly opened an investigation into Federal Reserve Chair Jerome Powell. In response, Powell released a video statement asserting that the threat is not related to his past testimonies or internal administrative matters. He characterized the allegations as "pretexts" from the Trump administration, stating that the threat of criminal charges is a direct consequence of the Federal Reserve setting interest rates based on public service rather than presidential preference.

On the data front, the U.S. Bureau of Labor Statistics revealed that Nonfarm Payrolls added 50,000 jobs in December, falling short of the 60,000 forecast. Despite the slower hiring, the Unemployment Rate dropped to 4.4% from 4.6%, effectively easing concerns regarding a rapid deterioration of the labor market. Furthermore, the University of Michigan Consumer Sentiment Index rose to 54 in January, beating expectations. However, inflation expectations remain a concern, with five-year expectations ticking up to 3.4%, indicating that the Fed’s battle against price pressures is far from over. Key Moving Average Rejection Points Toward Potential EURUSD Downside Extension_1

Key Moving Average Rejection Points Toward Potential EURUSD Downside Extension_1

Technical Analysis

The EUR/USD pair has consistently failed to establish a new "higher high," a clear technical signal that the bearish trend remains the dominant market force. This downward structure originated on December 23rd, when the pair reached a peak of 1.1809 before entering a sustained corrective phase.

A significant technical shift has occurred as the 200-period Moving Average, which previously functioned as a reliable support floor, is now acting as a resistance ceiling. This "support-turned-resistance" flip suggests that a new bearish impulse is likely underway. The primary downside objective is currently set at the 1.1604 horizontal support level—a zone where the price has found buyers in the past and could potentially trigger a temporary bounce.

From a momentum perspective, the Relative Strength Index (RSI) has reached the 57 level. While this is not yet in overbought territory, a notable divergence/convergence is forming: the RSI is hitting higher levels than its previous peaks while the price itself fails to move higher. This often indicates that bullish momentum is exhausting rapidly, allowing bears to reclaim control.

Traders should monitor the 1.1700 level closely. A decisive breakout and close above this resistance zone would effectively invalidate the current bearish setup, potentially opening the door for a more prolonged bullish recovery toward the 1.1750 region.

Trading Recommendations

Trading direction: Sell

Entry price: 1.1665

Target price: 1.1605

Stop loss: 1.1705

Validity: Jan 23, 2025 15:00:00

Risk Warnings and Disclaimers

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