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GBP/JPY Daily Outlook
Daily Pivots: (S1) 211.69; (P) 212.29; (R1) 213.28; More...
Immediate focus is back on 214.83 as GBP/JPY's rebound accelerates higher. Firm break there will resume larger up trend to 220.90 projection level next. Rejection by 214.83 will bring more consolidations first. But in case of another dip, downside should be contained by 55 D EMA (now at 209.70) to bring rally resumption.
In the bigger picture, up trend from 123.94 (2020 low) is in progress. Next target is 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90. On the downside, break of 205.30 resistance turned support is needed to indicate medium term topping. Otherwise, outlook will stay bullish even in case of deep pullback.
Yen Slides Again as Election Bets Build
Yen selloff returned to focus in Asian trading today as investors positioned ahead of Japan’s snap election this weekend. continues to enjoy solid public support. Although recent polls show a modest dip in approval, her standing remains strong enough to anchor expectations of electoral success.
More importantly for markets, her ruling Liberal Democratic Party appears on track to comfortably exceed the 233-seat threshold needed for a single-party majority in the House of Representatives. A new survey by Asahi Shimbun, conducted between January 31 and February 1, suggests that with coalition partner Nippon Ishin, the ruling bloc could secure more than 300 of the 465 seats at stake in a landslide outcome.
Voting on February 8 will determine the next lower house, but markets are already pricing in the implications of a decisive LDP victory rather than waiting for confirmation. A commanding victory would strengthen Takaichi’s hand in pursuing fiscal stimulus. Investors fear that expanded spending plans would worsen Japan’s already heavy debt load, pressuring government bonds and undermining Yen.
In the US, attention briefly shifted away from shutdown risk after President Donald Trump signed a spending deal into law on Tuesday, ending a partial government shutdown. The legislation ensures full-year federal funding through September, with the exception of the Department of Homeland Security, which receives only a two-week extension as lawmakers debate immigration enforcement measures. The deal passed the Senate with broad bipartisan backing and scraped through the House by a narrow margin, removing a near-term tail risk for markets.
Elsewhere, oil prices rebounded as geopolitical risks intensified. Markets reacted after the US military said it had shot down an Iranian drone that approached the Abraham Lincoln in the Arabian Sea. The incident has raised concerns that efforts to de-escalate US–Iran tensions could falter. Oil markets are rapidly repricing geopolitical risk as the perceived probability of direct US action increases.
For the week so far, Yen sits firmly at the bottom of the FX performance table, followed by Swiss Franc and Euro. Aussie remains the strongest performer, trailed by Kiwi and Sterling. Dollar and Loonie trade in the middle of the pack.
In Asia, at the time of writing, Nikkei is down -0.92%. Hong Kong HSI is down -0.21%. China Shanghai SSE is up 0.12%. Singapore Strait Times is up 0.10%. Japan 10-year JGB yield is down -0.009 at 2.251. Overnight, DOW fell -0.34%. S&P 500 fell -0.84%. NASDAQ fell -1.43%. 10-year yield fell -0.001 to 4.274.
New Zealand jobs grow 0.5% in Q4, unemployment ticks to decade-high
New Zealand’s labor market delivered mixed signals in Q4. Employment rose 0.5% qoq, beating expectations for a 0.3% gain, pointing to continued job creation. Employment rate edged up to 66.7% from 66.6%, reinforcing the view that labor demand remains resilient.
At the same time, unemployment rate climbed to 5.4% from 5.3%, above expectations and the highest since the September 2015 quarter. The rise was accompanied by an increase in the labor force participation rate to 70.5% from 70.3%, suggesting that more people are entering or re-entering the job market, which is adding to slack even as hiring continues.
Wage pressures remained contained. The labor cost index rose 2.0% yoy, with private sector wages up 2.0% and public sector wages up 2.2%. The combination of steady employment growth, rising participation, and moderate wage inflation points to a labor market that is still cooling gradually.
NZD/USD in range awaits upside breakout, as RBNZ outlook holds after job data
NZD/USD is trading steadily in range after New Zealand’s Q4 employment data delivered few surprises for policy expectations. The mixed report offered early hints of stabilization but stopped well short of forcing a rethink at the RBNZ. Interest rate is expected to remain on hold at 2.25% for most of the year.
The next policy move is still expected to be a hike rather than another cut, but timing remains highly uncertain. Whether that comes late in 2026 or slips into early 2027 will depend on how growth, inflation, and labor market slack evolve. For now, it is too early to draw firm conclusions.
Technically, NZD/USD continues to consolidate below the 0.6092 short-term top. While a deeper pullback cannot be ruled out, downside should be contained well above 0.5852 resistance turned support. Current rise from 0.5580 is seen as the third leg of the pattern from 0.5484 (2025 low). Above 0.6092 should send NZD/USD through 0.6119 (2025 high) to 100% projection of 0.5484 to 0.6119 from 0.5580 at 0.6215.
Longer term, the 0.62 resistance area is decisive. Sitting near 38.2% retracement of 0.7463 (2021) to 0.5484 at 0.6240, it will define whether the recovery from 0.5484 evolves into a broader bullish trend reversal or stalls as a corrective rally within a dominant downtrend.
Japan PMI composite finalized at 53.1, broadening growth at start of 2026
Japan’s PMI Services was finalized at 53.7 in January, up from December’s 51.6. PMI Composite rose to 53.1 from 51.1. The data point to a clear acceleration in private-sector activity at the start of 2026, with growth firmly back above expansionary levels.
According to Annabel Fiddes of S&P Global Market Intelligence, business activity rebounded at the fastest pace since May 2023. Services remained the primary growth engine, posting the strongest rise in activity in nearly a year, while manufacturing output also returned to growth for the first time since last June.
The surveys suggest the recovery is becoming more broad-based. Demand improved across both manufacturing and services simultaneously for the first time in more than two-and-a-half years, a notable shift after a prolonged period of uneven momentum. Employment was another bright spot, with firms adding staff across both sectors to expand capacity in response to stronger demand.
Cost pressures eased at the start of the year, with input prices rising at their slowest pace in almost two years. However, companies raised selling prices more aggressively, indicating efforts to rebuild margins.
GBP/JPY Daily Outlook
Daily Pivots: (S1) 211.69; (P) 212.29; (R1) 213.28; More...
Immediate focus is back on 214.83 as GBP/JPY's rebound accelerates higher. Firm break there will resume larger up trend to 220.90 projection level next. Rejection by 214.83 will bring more consolidations first. But in case of another dip, downside should be contained by 55 D EMA (now at 209.70) to bring rally resumption.
In the bigger picture, up trend from 123.94 (2020 low) is in progress. Next target is 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90. On the downside, break of 205.30 resistance turned support is needed to indicate medium term topping. Otherwise, outlook will stay bullish even in case of deep pullback.
GBP/USD Clings To Support, Downside Risks Still In Play
Key Highlights
- GBP/USD started a downside correction from 1.3870.
- A declining channel or a possible bullish flag is forming with support at 1.3600 on the 4-hour chart.
- EUR/USD trimmed some gains and traded below 1.1880.
- The UK Services PMI could remain stable at 54.3 in Jan 2026.
GBP/USD Technical Analysis
The British Pound rallied above 1.3650 and 1.3750 against the US Dollar. GBP/USD even climbed above 1.3850 before the bears appeared.
Looking at the 4-hour chart, the pair traded as high as 1.3869 and recently saw a downside correction. There was a drop below the 1.3800 and 1.3750 levels. The pair declined below the 38.2% Fib retracement level of the upward move from the 1.3342 swing low to the 1.3869 high.
It found bids near the 1.3640 zone. Immediate support could be 1.3645. The first major area for the bulls might be near 1.3600 or the 50% Fib retracement level of the upward move from the 1.3342 swing low to the 1.3869 high.
There is also a declining channel or a possible bullish flag forming with support at 1.3600. The main support sits at 1.3550 and the 100 simple moving average (red, 4-hour), below which the pair might test the 200 simple moving average (green, 4-hour).
If there is a fresh increase, the pair could face resistance near 1.3750. The first key hurdle could be 1.3800. The next stop for the bulls might be 1.3860, where they could face hurdles. A close above 1.3860 could open the doors for more gains. In the stated case, the bulls could aim for a move toward 1.4000.
Looking at EUR/USD, the pair corrected some gains and tested the 1.1780 support. It is now stuck in a range and facing hurdles near 1.1850.
Upcoming Key Economic Events:
- UK Services PMI for Jan 2026 – Forecast 54.3, versus 54.3 previous.
- US S&P Global Services PMI for Jan 2026 – Forecast 52.5, versus 52.5 previous.
- US ISM Services PMI for Jan 2026 – Forecast 53.5, versus 54.4 previous.
Japan PMI composite finalized at 53.1, broadening growth at start of 2026
Japan’s PMI Services was finalized at 53.7 in January, up from December’s 51.6. PMI Composite rose to 53.1 from 51.1. The data point to a clear acceleration in private-sector activity at the start of 2026, with growth firmly back above expansionary levels.
According to Annabel Fiddes of S&P Global Market Intelligence, business activity rebounded at the fastest pace since May 2023. Services remained the primary growth engine, posting the strongest rise in activity in nearly a year, while manufacturing output also returned to growth for the first time since last June.
The surveys suggest the recovery is becoming more broad-based. Demand improved across both manufacturing and services simultaneously for the first time in more than two-and-a-half years, a notable shift after a prolonged period of uneven momentum. Employment was another bright spot, with firms adding staff across both sectors to expand capacity in response to stronger demand.
Cost pressures eased at the start of the year, with input prices rising at their slowest pace in almost two years. However, companies raised selling prices more aggressively, indicating efforts to rebuild margins.
NZD/USD in range awaits upside breakout, as RBNZ outlook holds after job data
NZD/USD is trading steadily in range after New Zealand’s Q4 employment data delivered few surprises for policy expectations. The mixed report offered early hints of stabilization but stopped well short of forcing a rethink at the RBNZ. Interest rate is expected to remain on hold at 2.25% for most of the year.
The next policy move is still expected to be a hike rather than another cut, but timing remains highly uncertain. Whether that comes late in 2026 or slips into early 2027 will depend on how growth, inflation, and labor market slack evolve. For now, it is too early to draw firm conclusions.
Technically, NZD/USD continues to consolidate below the 0.6092 short-term top. While a deeper pullback cannot be ruled out, downside should be contained well above 0.5852 resistance turned support. Current rise from 0.5580 is seen as the third leg of the pattern from 0.5484 (2025 low). Above 0.6092 should send NZD/USD through 0.6119 (2025 high) to 100% projection of 0.5484 to 0.6119 from 0.5580 at 0.6215.
Longer term, the 0.62 resistance area is decisive. Sitting near 38.2% retracement of 0.7463 (2021) to 0.5484 at 0.6240, it will define whether the recovery from 0.5484 evolves into a broader bullish trend reversal or stalls as a corrective rally within a dominant downtrend.
New Zealand jobs grow 0.5% in Q4, unemployment ticks to decade-high
New Zealand’s labor market delivered mixed signals in Q4. Employment rose 0.5% qoq, beating expectations for a 0.3% gain, pointing to continued job creation. Employment rate edged up to 66.7% from 66.6%, reinforcing the view that labor demand remains resilient.
At the same time, unemployment rate climbed to 5.4% from 5.3%, above expectations and the highest since the September 2015 quarter. The rise was accompanied by an increase in the labor force participation rate to 70.5% from 70.3%, suggesting that more people are entering or re-entering the job market, which is adding to slack even as hiring continues.
Wage pressures remained contained. The labor cost index rose 2.0% yoy, with private sector wages up 2.0% and public sector wages up 2.2%. The combination of steady employment growth, rising participation, and moderate wage inflation points to a labor market that is still cooling gradually.
First Impressions: NZ Labour Market Statistics, December Quarter 2025
The unemployment rate ticked up to 5.4% in the December quarter. The details were positive though, with growth in jobs and hours being outstripped by an even larger rise in participation.
- Unemployment rate: 5.4% (prev: 5.3%, Westpac: 5.3%, RBNZ: 5.3%, mkt: 5.3%)
- Employment change: +0.5% (prev: 0.0%, Westpac: +0.3%, RBNZ: +0.2%, mkt: +0.3%)
- Participation rate: 70.5% (prev: 70.3%, Westpac: 70.3%, RBNZ: 70.3%, mkt: 70.3%)
- Labour costs (private sector): +0.5% (prev: +0.4%, Westpac: +0.5%, RBNZ: +0.5%, mkt: +0.5%)
The December quarter labour market surveys showed some early signs of improvement in the jobs market, despite a further small rise in the headline unemployment rate. Wage growth measures remained unsurprisingly subdued at this stage of the cycle.
Overall, we think the results were broadly in line with the Reserve Bank’s forecasts and won’t give them much new to mull over ahead of their 18 February policy review. What that means is there is little here to hurry the RBNZ quickly towards reversing those last 75bp of OCR cuts made after August 2025. Still muted wage pressures should imply there is time to assess the strength and durability of the recovery before raising rates. We remain comfortable with our forecast of a December 2026 first rate hike.
The number of people employed rose by 0.5% for the quarter – actually more than what was suggested by the Monthly Employment Indicator, and ahead of the 0.3% rise in the working-age population. However, there was an even more significant rise in labour force participation from 70.3% to 70.5%, with the net result being an uptick in the unemployment rate. In any case, both of these ‘surprises’ are well with the margin of error for this survey, and we don’t regard them as being meaningfully different from our expectations.
Another positive indicator from the household survey was a 1% rise in hours worked for the quarter, on top of a 1.1% rise in the September quarter. We certainly wouldn’t dismiss this lightly, given that this measure has been an unusually good guide to the swings in quarterly GDP in recent times. However, there was a contrasting 0.5% fall in total hours paid in the business-oriented Quarterly Employment Survey (which had also seen a strong 1.1% rise last quarter).
Given the existing degree of slack in the labour market, wage trends unsurprisingly remained subdued. The Labour Cost Index rose by 0.4% overall for the quarter, with a 0.5% rise in the private sector and a more modest 0.3% rise in the public sector. On an annual basis the LCI rose by 2.0%, its slowest pace since March 2021.
The unadjusted analytical LCI, which includes pay increases that are related to higher productivity, rose by 0.8% for the quarter, slightly more than the 0.7% rise in the September quarter. The annual growth rate slowed from 3.4% to 3.3%, also the lowest reading since March 2021. The distribution of pay rates continues to drift towards annual increases in the 2-3% range, and away from the larger increases that were more common in previous years.
S&P 500 (SPX) Approaches Completion of Elliott Wave Diagonal Pattern
The S&P 500 (SPX) continues to advance as it works toward completing a diagonal Elliott Wave structure that began at the November 21, 2025 low. From that level, wave ((i)) pushed higher and ended at 6986.33. The market then entered wave ((ii)), which unfolded as a clear zigzag. Wave (a) declined to 6885.74, while wave (b) recovered to 6979.34. Wave (c) extended lower and finished at 6788.87, completing wave ((ii)) at a higher degree.
Following this correction, the Index resumed its upward trajectory in wave ((iii)), which progressed toward 7002.28. A pullback in wave ((iv)) later developed and concluded at 6870.8. The structure has since shifted into wave ((v)), which is advancing with an internal subdivision that aligns with an impulsive pattern at the lesser degree. From the wave ((iv)) low, wave (i) rose to 6971.09, and wave (ii) retraced to 6893.48.
The broader bullish outlook remains intact while the pivot at 6788.87 holds. As long as this level stays protected, any pullback is expected to attract buyers within a three‑ or seven‑swing sequence. This behavior supports the potential for further upside as the diagonal structure continues to mature. The overall pattern maintains its integrity and reinforces the view that the Index retains scope for additional strength in the near term.
S&P 500 (SPX) 45 minute chart
SPX Elliott Wave video:
https://www.youtube.com/watch?v=E-XoGIGBp60
USDCHF Moves Higher as Expected and Hits Targets
On January 30 2026 our clients was expecting for USDCHF to push higher to terminate red wave c, red wave y, blue wave (iv).
The first chart below was published in our private members area and clearly shows the Elliott Wave count was calling for the red wave c push higher.
The second chart is my buy entry. When the USDCHF pair tagged the bullish FVG zone (Gray Box) I entered the buy trade at 0.7667 with a 29 pip stop loss at 0.7638 and a take profit target at the 2R 0.7725.
Added confirmation for the buy entry was the bullish divergence market pattern (Pink) which formed at the red wave x termination.
USDCHF 1 Hour Chart January 30 2026
USDCHF 1 Hour Chart January 30 2026
USDCHF moves higher and hits 2R target at 0.7725 where I closed buy position for +58 pips and a +2% profit gain. (Risking 1% on every trade)
A trader should always have multiple strategies all lined up before entering a trade. Never trade off one simple strategy. When multiple strategies all line up it allows a trader to see a clearer trade setup.
We at EWF never say we are always right. No market service provider can forecast markets with 100% accuracy. Only thing we at EWF 100%, is that we are RIGHT more than we are WRONG.
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade.
Hope you enjoyed this article and follow me on social media for updates and questions> @AidanFX
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EURJPY Wave Analysis
EURJPY: ⬆️ Buy
- EURJPY reversed from support area
- Likely to rise to resistance level 185.30
EURJPY currency pair recently reversed up from the support area located between the pivotal support level 182.70 (which has been reversing the pair from the start of this year) and the support trendline of the wide daily up channel from October.
The pair made multiple Japanese candlesticks reversal patterns Doji near the support level 182.70 – signalling the strength of this support level.
Given the strong daily uptrend, EURJPY currency pair can be expected to rise in the active impulse wave 5 toward the next resistance level 185.30.
