It was a very volatile week. USD/JPY came under pressure early, testing lower levels as markets remained cautious about possible yen-buying intervention. Stronger-than-expected U.S. Durable Goods Orders failed to support the U.S. dollar. At the same time, gold and silver surged early in the week, with gold breaking above $5,000 as investors sought safe-haven assets.
Sentiment shifted on Friday after President Trump nominated Kevin Warsh as the next Federal Reserve Chair. Markets view Warsh as cautious about cutting interest rates too quickly. Combined with strong U.S. PPI data, this triggered a recovery in the U.S. dollar and heavy profit-taking in gold. Gold fell around 10% on Friday, though it finished the week only slightly lower overall.
U.S. and Japanese equities remained range-bound for most of the week and closed marginally lower. In Europe, GDP data came in above expectations, offering some support despite continued market uncertainty.
Markets This Week
U.S. Stocks
It was a relatively quiet week for U.S. stocks. Better-than-expected U.S. economic data helped push prices higher, but rallies were met with strong selling as investors remained cautious about the outlook amid elevated geopolitical risks. In the current environment, the preferred short-term strategy continues to be selling into strength rather than chasing breakouts. Resistance is seen at 49,500 and 50,000, while support is located at 48,500, 48,000, 47,500, and 47,000.
Japanese Stocks
The Nikkei started the week under pressure as the yen strengthened but later recovered to close slightly higher. Market sentiment improved as investors expect Prime Minister Takaichi to secure a majority in the February 8 election and pursue policies aimed at supporting economic growth. Technical indicators point to sideways conditions, and with some caution likely ahead of the election, the market may offer multiple range-trading opportunities in the coming week. Resistance is seen at 54,000円, 54,500円, and 55,000円, while support is located at 52,500円, 52,000円, 51,500円, and 51,000円.
USD/JPY
USD/JPY fell sharply early in the week as traders cut long positions on rising fears of yen-buying intervention. Midweek, U.S. officials denied plans to support the yen, allowing the pair to recover, and it finished the week stronger after better-than-expected U.S. data and comments from President Trump suggesting the next Fed Chair may be cautious about cutting rates too quickly. Despite the rebound, the overall trend remains lower, and as long as USD/JPY stays below 155.50, selling rallies remains the preferred approach. Resistance is seen at 155.5, 156.6, 157.5, 158, 159, 159.5, and 160, while support is located at 153, 152, 151, and 150.
Gold
Gold surged to fresh record highs above $5,000 earlier in the week as speculative buying accelerated, but this was followed by a sharp reversal on Friday as profit-taking emerged and the U.S. dollar recovered after President Trump named a new Federal Reserve Chair. Volatility has risen sharply, and prices have slipped back below the 10-day moving average, suggesting the short-term uptrend has weakened. While the longer-term trend for gold remains positive, near-term price action is likely to stay choppy, though the size of Friday’s drop may attract dip buyers. Resistance is seen at $5,000, $5,200, $5,500, and $5,600, while support is located at $4,700, $4,600, and $4,500.
Crude Oil
WTI crude had a strong week as ongoing unrest in Iran and better-than-expected U.S. growth data supported speculative buying. The technical picture has improved, with the 10-day moving average turning higher and pointing to further upside. In the short term, selling interest may emerge ahead of the $66.50 level, particularly if President Trump moves to ease tensions with Iran. Resistance is seen at $66.50, $70, and $75, while support is located at $59, $55, and $50.
Bitcoin
Bitcoin’s weak start to 2025 continued last week, with a break below $85,000 triggering further selling. Sentiment was also hurt by President Trump’s appointment of a new Federal Reserve Chair, which markets see as less supportive of rapid interest rate cuts. Prices have now fallen close to support around $75,000, which could lead to a short-term bounce, but the medium-term trend remains bearish. As a result, selling into strength—especially near the 10-day moving average—still looks like the preferred strategy. Resistance is seen at $85,000, $95,000, and $100,000, while support is located at $75,000, $72,500, and $65,000.
This Week’s Focus
- Monday: U.K. Nationwide HPI, E.U. HCOB Eurozone Manufacturing PMI, U.K. S&P Global Manufacturing PMI, U.S. S&P Global Manufacturing PMI and ISM Manufacturing PMI
- Tuesday: Australia RBA Interest Rate Decision
- Wednesday: Japan au Jibun Bank Services PMI, E.U. HCOB Eurozone Services PMI and CPI, U.K. S&P Global Services PMI, U.S. S&P Global Services PMI
- Thursday: Australia Trade Balance, U.K. BoE Interest Rate Decision, E.U. ECB Interest Rate Decision
- Friday: Japan Household Spending, U.S. Nonfarm Payrolls and Michigan Consumer Sentiment
Another volatile week is expected, with gold in focus and traders positioning around the yen and the Nikkei ahead of Japan’s February 8 election. The Bank of England and the ECB are both expected to keep interest rates unchanged, shifting attention to the tone of their post-meeting statements. U.S. employment data on Friday could trigger sharp market moves, while the Australian central bank may add to volatility if it signals a potential interest rate increase.
