Last week, USD/JPY started higher after Sanae Takaichi’s strong election win. However, as the result was largely expected, selling soon entered the market. Even though U.S. employment data came in stronger than expected, adding 130,000 jobs and lowering the chances of a near-term U.S. rate cut, USD/JPY still ended the week lower.
U.S. stocks also fell over the week, with technology shares leading the decline. Investors are increasingly concerned about how artificial intelligence could affect existing business models. Weaker-than-expected U.S. Retail Sales added further pressure, although lower CPI data helped ease some inflation worries.
Bitcoin remained under pressure, with sellers continuing to dominate and concerns growing about its longer-term outlook. Gold, on the other hand, continued its steady rise as investors looked for stability.
Markets This Week
U.S. Stocks
Concerns about the impact of AI continued to dominate markets last week, a theme we have seen throughout 2026. After hitting record highs earlier in the week, the Dow turned lower as negative sentiment spread. The move below the 10-day moving average suggests the recent uptrend may be over for now. With AI concerns unlikely to disappear soon, selling into rallies may offer better trading opportunities this week. Resistance is at 50,500, 51,000, and 51,500, while support is at 49,500, 49,000, 48,500, and 48,000.
Japanese Stocks
The Nikkei started the week higher as markets viewed Takaichi’s victory as positive for Japanese stocks. However, weakness in U.S. equities and a stronger yen limited further gains. Although the recent uptrend remains strong, the market may move lower in the short term, especially if U.S. stocks stay under pressure. Without fresh positive news, gains may be difficult to sustain, so sideways to slightly lower movement is possible this week. Resistance is seen at 58,000円, 59,000円, and 60,000円, while support is at 56,000円, 55,000円, 54,000円, and 53,000円.
USD/JPY
USD/JPY moved lower as traders took profit after Takaichi’s victory. Attention has shifted to the narrowing interest rate gap between the U.S. and Japan, as the Bank of Japan continues to signal that further rate hikes are possible. The pair is still holding above key support at 152 and is trading well below the 10-day moving average, so a short-term bounce at the start of the week is possible. However, weaker-than-expected U.S. data could quickly push the pair lower again. Resistance is at 155, 156, 158, and 159, while support is at 152, 151, and 150.
Gold
Gold had a relatively quiet week, trading around the key $5,000 level. Prices moved lower at times, but strong buying interest remained, showing that gold is still in demand. Buying opportunities may offer the better strategy overall, but with the chart pointing to sideways movement near $5,000, buying on dips rather than chasing rallies may be the smarter short-term approach. Resistance is seen at $5,100, $5,200, $5,500, and $5,600, while support is at $4,900, $4,800, and $4,650.
Crude Oil
WTI crude traded sideways last week and failed to break above recent resistance, as tensions in Iran did not escalate further and the technical picture weakened. With prices now below the 10-day moving average, the market appears to be in a range, with slightly lower levels more likely in the short term. Resistance remains at $66.50, $70, and $75, while support is at $60, $55, and $50.
Bitcoin
Bitcoin traded sideways last week as investors reviewed the recent sharp fall and continued to question its long-term future. The price has moved back above the 10-day moving average, which is now flat, suggesting that another large drop is less likely in the short term. For now, range trading may offer the best opportunities as the market waits for clearer direction. Resistance is at $70,000, $75,000, $80,000, and $85,000, while support is at $65,000, $60,000, and $55,000.
This Week’s Focus
- Monday: Japan GDP and Industrial Production, E.U. Industrial Production
- Tuesday: E.U. German CPI and ZEW Economic Sentiment, U.K. Unemployment Rate
- Wednesday: Japan Trade Balance, U.K. CPI, U.S. Durable Goods, Housing Starts, Industrial Production and FOMC Meeting Minutes
- Thursday: Australia Unemployment Rate, U.S. Trade Balance
- Friday: Japan National CPI, U.K. Retail Sales and S&P Global Manufacturing PMI, E.U. HCOB Eurozone Manufacturing PMI, U.S. PCE Price index, S&P Global Manufacturing PMI, New Home Sales and Michigan Consumer Sentiment
Although the week may begin quietly due to the U.S. holiday, it could become more interesting as markets focus on Wednesday’s key economic announcements and the Fed minutes. Investors will be watching closely to see whether U.S. stocks come under further pressure. USD/JPY is approaching an important support level and is likely to see increased volatility. Meanwhile, Bitcoin has consolidated at lower levels and is worth monitoring closely for potential trading opportunities.
