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Daily Pivots: (S1) 157.87; (P) 158.66; (R1) 159.23; More...

Intraday bias in USD/JPY remains neutral and more consolidations could be seen below 159.44. Deeper retreat could be seen but downside should be contained above 156.10 support to bring another rally. On the upside, above 159.44 will resume larger rise from 139.87. Next target is 200% projection of 142.66 to 150.90 from 145.47 at 161.95, which is close to 161.94 high.

In the bigger picture, corrective pattern from 161.94 (2024 high) could have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. Decisive break of 158.85 structural resistance will solidify this bullish case and target 161.94 for confirmation. On the downside, break of 154.38 support will dampen this bullish view and extend the corrective range pattern with another falling leg.

Daily Pivots: (S1) 1.3423; (P) 1.3443; (R1) 1.3467; More...

GBP/USD's fall from 1.3567 resumed by breaking through 1.3389 temporary low and intraday bias is back on the downside. Sustained break of 55 D EMA (now at 1.3375) will argue that the decline is another falling leg in the corrective pattern from 1.3787. In this case, deeper fall should be seen back to 1.3008 support. For now, risk will stay on the downside as long as 1.3494 resistance holds, in case of recovery.

In the bigger picture, price actions from 1.3787 (2025 high) are seen as a correction to the larger up trend from 1.3051 (2022 low). Deeper decline could be seen as the pattern extends, but downside should be contained by 38.2% retracement of 1.0351 to 1.3787 at 1.2474 to bring rebound. Break of 1.3787 for up trend resumption is expected at a later stage.

Daily Pivots: (S1) 1.1633; (P) 1.1648; (R1) 1.1659; More….

EUR/USD's fall from 1.1807 resumed by breaking through 1.1617 temporary low and intraday bias is back on the downside. Current development revived the case that corrective pattern from 1.1917 is already in its third leg. Deeper fall would be seen to 1.1467 support and below. Risk will now stay on the downside as long as 1.1698 resistance holds, in case of recovery.

In the bigger picture, as long as 55 W EMA (now at 1.1416) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will carry larger bullish implication. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Dollar climbed sharply in early US session as markets continued to pare back bets on a Fed rate cut in Q1 2026, a move driven by stronger-than-expected labor market data. Initial jobless claims fell back below the psychological 200k mark, countering dovish concerns about extended labor-market deterioration.

Odds of a March rate cut have collapsed further to below 22%. Also, markets now see roughly a two-in-three chance that a rate cut will occur by the end of the first half — down sharply from near 80% just a week ago. The first easing move might come only after a leadership transition at the Fed.

Across FX markets today so far, Dollar is the best performer, followed by Aussie and Loonie. Sterling is struggling the most amid benign UK data that hasn’t materially lifted the Pound, with Euro and Swiss Franc also lagging. Yen and Kiwi sit in the middle of the performance table.

Elsewhere in commodities, oil prices tumbled from multi-month highs after US President Donald Trump’s remarks eased fears of imminent US military action against Iran, a catalyst that had recently underpinned energy markets. Adding to the supply picture, Venezuelan crude shipments have resumed. That supply increase is seen contributing to the sentiment that near-term oversupply risks would outweigh geopolitical pressures, keeping a lid on prices.

In Europe, at the time of writing, FTSE is up 0.47%. DAX is up 0.02%. CAC is down -0.18%. UK 10-year yield is up 0.036 at 4.38. Germany 10-year is up 0.011 at 2.829. Earlier in Asia, Nikkei fell -0.42%. Hong Kong HSI fell -0.28%. China Shanghai SSE fell -0.33%. Singapore Strait Times rose 0.43%. Japan 10-year JGB yield fell -0.017 to 2.169.

US initial jobless claims fall to 198k, signal little labor market stress

US labor market conditions showed renewed firmness, with initial jobless claims falling more than expected in the latest week. Claims dropped by -9k to 198k in the week ending January 10, below expectations of 208k and marking one of the lowest readings of the past year.

The four-week moving average of initial claims declined by -6.5k to 205k, the lowest level since January 20, 2024. The smoothing measure confirms that layoffs remain limited, with little evidence of sustained deterioration in hiring conditions.

Continuing claims also edged lower, falling 19k to 1.884 million in the week ending January 3. The four-week average was broadly unchanged at 1.889 million.

Eurozone exports fall -3.4% yoy in Nov, EU down -4.4%, external demand drags

Eurozone trade data for November pointed to weakening external demand, even as the bloc maintained a modest surplus. Goods exports fell -3.4% yoy to EUR 240.2B, while imports declined -1.3% to EUR 230.3B, leaving a trade surplus of EUR 9.9B. The resilience came from within the bloc. Intra-Eurozone trade rose 0.8% yoy to EUR 220.9B, partially offsetting softness in extra-Eurozone flows.

At the broader EU level, goods exports dropped -4.4% yoy to EUR 213.8B and imports fell -2.9% to EUR 205.7B, resulting in a EUR 8.1B trade surplus.

By trading partner, exports to the US fell sharply by -20.3% year-on-year, while shipments to the UK declined -6.0%. Trade with China was broadly stable, with exports down just -1.2% despite stronger imports, keeping the bilateral deficit large. Switzerland stood out as a relative bright spot, with EU exports rising 6.7%.

Eurozone industrial output rises 0.7% mom in November, led by capital goods

Eurozone industrial production rose 0.7% mom in November, outperforming expectations for a 0.5% gain. The gains, however, were uneven across categories.

Capital goods output jumped 2.8%, providing the main lift, while intermediate goods rose a modest 0.3%. By contrast, energy production fell sharply by -2.2%, while durable and non-durable consumer goods declined -1.3% and -0.6% respectively, pointing to still-soft consumer demand.

Across the wider EU, industrial production increased just 0.2% on the month. Estonia (6.0%), Lithuania (5.8%), and Czechia (2.8%) recorded the strongest gains, while Luxembourg (-7.3%), Denmark (-5.1%), and Portugal (-3.0%) posted the steepest declines.

UK GDP beats with 0.3% mom growth in November, services lead

UK economic output surprised to the upside in November, offering a modest boost to the growth outlook late in the year. GDP rose 0.3% mom, beating expectations for flat growth, with strength concentrated in services and production.

Services output increased 0.3% mom, while production jumped 1.1% mom, offsetting a sharp -1.3% mom decline in construction activity. The data points to improving momentum in consumer- and business-facing sectors, even as construction continues to struggle.

Over the three months to November, GDP edged up 0.1%. Services grew 0.2%, while production slipped -0.1% due largely to weaker motor vehicle manufacturing, and construction fell -1.1%. On a year-on-year basis, GDP expanded 1.3%, led by services growth of 1.4%. Production rose 0.4% and construction rose 0.7%.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1633; (P) 1.1648; (R1) 1.1659; More….

EUR/USD's fall from 1.1807 resumed by breaking through 1.1617 temporary low and intraday bias is back on the downside. Current development revived the case that corrective pattern from 1.1917 is already in its third leg. Deeper fall would be seen to 1.1467 support and below. Risk will now stay on the downside as long as 1.1698 resistance holds, in case of recovery.

In the bigger picture, as long as 55 W EMA (now at 1.1416) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will carry larger bullish implication. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

US labor market conditions showed renewed firmness, with initial jobless claims falling more than expected in the latest week. Claims dropped by -9k to 198k in the week ending January 10, below expectations of 208k and marking one of the lowest readings of the past year.

The four-week moving average of initial claims declined by -6.5k to 205k, the lowest level since January 20, 2024. The smoothing measure confirms that layoffs remain limited, with little evidence of sustained deterioration in hiring conditions.

Continuing claims also edged lower, falling 19k to 1.884 million in the week ending January 3. The four-week average was broadly unchanged at 1.889 million.

Full US jobless claims release here.

• Donald Trump has no intention of dismissing Jerome Powell.
• The White House’s decision to postpone tariffs on minerals has dealt a blow to precious metals.

When Donald Trump sneezes, the markets get a fever; when he is in a nice mood, they flourish. The US president’s statement that he has no plans to oust Jerome Powell has bolstered the US dollar. The White House’s decision to postpone tariffs on imports of critical minerals has caused precious metal prices to plummet. The Republicans’ words that Iran no longer plans large-scale executions of protesters cut off oxygen to oil.

The Trump factor will undoubtedly manifest itself in the fate of the US dollar. However, this will most likely happen in the second quarter. The appointment of a new Fed chair and the replacement of FOMC governors with people loyal to the president will allow the composition of the Committee to be reshuffled and force the derivatives market to bet on aggressive monetary expansion. Until then, the EURUSD is likely to continue falling.

The US dollar is benefiting from a prolonged pause in the Fed’s cycle. The economy remains strong. This is confirmed by the acceleration of retail sales to 0.6% m/m in November. Inflation is slowing down, and producer price growth slowed to 0.1% in October and 0.2% m/m in November. The central bank can afford to sit back and watch how events unfold.

Meanwhile, passion surrounding the yen continues to run high. Japanese Finance Minister Satsuki Katayama said that the government will take appropriate measures against speculators on Forex, without ruling out any options. Similar statements were previously used by Tokyo immediately before currency interventions. Unsurprisingly, USDJPY bulls got scared and retreated.

US Treasury Secretary Scott Bessent noted the undesirability of excessive yen volatility and the need for sound monetary policy. He has repeatedly stated that USDJPY can be forced to fall by raising the overnight rate.

Precious metals took a step back due to the White House’s intention to postpone tariffs on imports of critical minerals. Fears over the introduction of tariffs were the catalyst for the transfer of bullion from Europe and Asia to the US. This resulted in a shortage of physical assets, which fuelled the rally in silver, platinum and palladium. Gold was less affected by Donald Trump’s decision.

Market Overview

The crypto market capitalisation has shown a slight increase to $3.26T over the past 24 hours, as it paused its growth, releasing steam after rallying to a total capitalisation of $3.30T. The recovery to a two-month high still keeps the market within a typical corrective rebound of 61.8% of the initial downward momentum. Although it would be too hasty to ignore the sequence of rising local lows, it is still worth being prepared for the recovery momentum to lose steam.

Bitcoin rose to $98K on Wednesday, gaining for the third day during the US session, while Asian and European trading saw a correction and lull, respectively. The price of BTC touched the 61.8% level of the decline from the peak of $126K to the November lows of $80K. Further growth from these levels, especially exceeding $100K, will be an important signal that the decline in October and November may have been a deep correction, but did not break the bull market.

The relatively small Dash coin is experiencing an impressive rally, gaining over 130% since the beginning of the week. Technically, buyers pushed off the 200-day moving average, which had been providing support since September. The last comparable rise in scale was in early November, after which the price fell even lower over the next month and a half. It seems that the main reason for the growth is insufficient liquidity and the pump & dump approach, rather than the start of the alt season.

News Background

The revival of institutional demand signals that investors are actively reallocating capital after a period of caution and risk reduction at the end of last year, according to LVRG Research.

For the first time since mid-2022, the 52-week correlation between Bitcoin and gold has fallen to zero. Historically, the decoupling of these assets has preceded rallies in the first cryptocurrency.

According to Validator Queue, the number of coins locked in Ethereum staking has reached a new all-time high. There are 35.8 million ETH in the Beacon Chain network, which is 29.57% of the market supply of the second-largest cryptocurrency by capitalisation.

Liquidity in cryptocurrencies ceased to be distributed evenly last year, mainly concentrating in Bitcoin, Ethereum and a few other major coins, Wintermute notes. The situation arose against the backdrop of large institutional players actively entering the market.

Eurozone trade data for November pointed to weakening external demand, even as the bloc maintained a modest surplus. Goods exports fell -3.4% yoy to EUR 240.2B, while imports declined -1.3% to EUR 230.3B, leaving a trade surplus of EUR 9.9B. The resilience came from within the bloc. Intra-Eurozone trade rose 0.8% yoy to EUR 220.9B, partially offsetting softness in extra-Eurozone flows.

At the broader EU level, goods exports dropped -4.4% yoy to EUR 213.8B and imports fell -2.9% to EUR 205.7B, resulting in a EUR 8.1B trade surplus.

By trading partner, exports to the US fell sharply by -20.3% year-on-year, while shipments to the UK declined -6.0%. Trade with China was broadly stable, with exports down just -1.2% despite stronger imports, keeping the bilateral deficit large. Switzerland stood out as a relative bright spot, with EU exports rising 6.7%.

Full Eurozone trade balance release here.

Eurozone industrial production rose 0.7% mom in November, outperforming expectations for a 0.5% gain. The gains, however, were uneven across categories.

Capital goods output jumped 2.8%, providing the main lift, while intermediate goods rose a modest 0.3%. By contrast, energy production fell sharply by -2.2%, while durable and non-durable consumer goods declined -1.3% and -0.6% respectively, pointing to still-soft consumer demand.

Across the wider EU, industrial production increased just 0.2% on the month. Estonia (6.0%), Lithuania (5.8%), and Czechia (2.8%) recorded the strongest gains, while Luxembourg (-7.3%), Denmark (-5.1%), and Portugal (-3.0%) posted the steepest declines.

Full Eurozone industrial production release here.

The GBP/USD pair held around 1.3430 USD on Thursday, with the pound strengthening yesterday following better-than-expected UK economic growth data. These figures may shape market expectations for Bank of England policy in the coming months.

Since the start of January, sterling has made limited headway against the US dollar but has strengthened notably against the euro. Dollar sentiment remains cautious due to geopolitical tensions involving Iran and Greenland, as well as renewed comments from President Donald Trump questioning the Federal Reserve's independence.

Investor sentiment toward the pound has turned more constructive at the start of 2026. According to the US Commodity Futures Trading Commission (CFTC), traders reduced bearish bets on the pound at the fastest pace in five months during the first week of January. The net long dollar position against sterling fell sharply to 2.577 billion USD, down from 6.586 billion USD at the end of December—marking the steepest weekly decline since September 2019.

Inflation in the UK eased faster than expected toward the end of 2025, and markets are currently pricing in two BoE rate cuts this year. However, analysts view this as overly optimistic: persistently weak growth and subdued inflation could ultimately weigh on the currency. Upcoming soft employment and inflation data for December will be key to reassessing the likelihood of a rate cut as early as February, though markets currently assign low odds to such a move.

Next week brings key releases, including consumer prices and labour market data, followed by GDP figures on Thursday. A Reuters poll suggests the UK economy contracted by 0.2% in the three months to November, with annual growth estimated at around 1.1%.

Technical Analysis: GBP/USD

H4 Chart:

On the H4 chart, GBP/USD is forming a broad consolidation range around 1.3455 USD. The range is expected to extend toward 1.3395 USD, followed by a corrective bounce to 1.3415 USD. Once complete, the downtrend may resume toward 1.3290 USD, with further potential to 1.3220 USD. The MACD indicator supports this bearish near-term outlook, with its signal line below zero and pointing firmly downward.

H1 Chart:

On the H1 chart, the pair has established a tight consolidation range around 1.3440 USD. A downward move toward 1.3395 USD is in progress, and a break below this level would open the door to further declines toward 1.3290 USD. The Stochastic oscillator aligns with this view, as its signal line is below 20 and trending lower, indicating sustained selling momentum.

Conclusion

Despite improving sentiment and a sharp reduction in speculative short positions, the pound remains vulnerable to downside risks from domestic data and shifting BoE expectations. Technically, the pair retains a near-term bearish bias, with key support levels at 1.3395 USD and 1.3290 USD. A break below these levels could accelerate declines, while any sustained recovery would likely require stronger-than-expected UK data in the coming week.