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Daily Pivots: (S1) 1.1585; (P) 1.1617; (R1) 1.1642; More….

Intraday bias in EUR/USD remains on the downside for the moment, as fall from 1.1807 is extending. The decline is seen as the third leg of the corrective pattern from 1.1917, and should target 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.

Daily Pivots: (S1) 1.3347; (P) 1.3397; (R1) 1.3431; More...

Intraday bias in GBP/USD remains mildly on the downside as fall from 1.3567 is in progress. 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) 0.7996; (P) 0.8019; (R1) 0.8055; More….

No change in USD/CHF's outlook as rise from 0.7860 is in progress. Intraday bias remains mildly on the upside for 0.8123 resistance. On the downside, below 0.7983 minor support will turn intraday bias neutral again first. Overall, corrective pattern from 0.7828 low is in progress and would extend further.

In the bigger picture, price actions from 0.7828 are seen as a correction. Larger down trend from 1.0342 (2017 high) is in still in progress. Break of 0.7828 will target 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8332 support turned resistance holds (2023 low).

Key takeaways

• Intervention risk is rising: USD/JPY stalled near the 159.45–159.75 resistance zone, levels historically linked to BoJ intervention, triggering sharp yen volatility as officials escalated verbal warnings, including the possibility of joint US–Japan action.
• JPY short squeeze risk is elevated: Speculative positioning in JPY futures has fallen to a one-year low, signalling crowded bearish bets. Any sustained USD/JPY downside could force short covering and amplify yen strength.
• Near-term technical bias turning lower: Bullish momentum in USD/JPY is fading, with a break below 158.15 likely to trigger a minor bearish reversal toward 157.50–156.12, while only a decisive move above 159.75 would revive upside risk.

The price actions of the USD/JPY have staged the expected push up and hit the lower limit of the first immediate resistance zone of 159.45/159.75 (printed an intraday high of 159.45 on Wednesday,14 January 2026. Coincidentally, it was also the same intraday high of 159.45 on 12 July 2024 that the Bank of Japan (BoJ) last intervened in the FX market to sell down the US dollar.

The Japanese yen has been the most volatile among major currencies in the last three trading sessions. The JPY hit an 18-month low against the greenback on Tuesday, 13 January 2026, at 159.17 per US dollar, despite a slew of verbal interventions from Japanese authorities at the start of this week.

USD/JPY K-shaped performance evaporated as intervention risk intensified

Fig. 1: 5-day rolling performance of the US dollar against major currencies as of 16 Jan 2026 (Source: TradingView)

The “strongest form of verbal intervention” comes in today’s Asia session (Friday, 16 January 2026), where Japan’s Finance Minister Katayama reiterated Tokyo’s readiness to act against excessive yen moves and, for the first time this week, highlighted the possibility of a US-Japan joint intervention in the FX market ahead of a thinning liquidity environment today (ahead of the weekend as well as the closure of US stock market on next Monday, 19 January for Martin Luther King, Jr. Day).

The USD/JPY dropped by 0.4% to hit an intraday low of 157.95 and erased its earlier “K-shaped” performance in the FX market before it rebounded slightly to 158.20 at the time of writing (see Fig. 1).

JPY futures positioning points to the risk of a short squeeze

Fig. 2: JPY futures large speculators net positions, excluding commercials net positions as of 6 Jan 2026 (Source: MacroMicro)

Based on the Commitment of Traders report compiled by the US Commodity Futures Trading Commission as of 6 January 2026, the number of large speculators’ net long positions in the JPY futures market, excluding commercials (hedgers) net positions, has declined to a 1-year low at 20,983 contracts (see Fig. 2).

Being a contrary opinion indicator, the positioning by large speculators in the JPY futures has skewed towards a significant degree of bearish bias on the JPY, and a minor bullish reversal in the price action of the JPY can amplify the risk of a short squeeze due to “JPY shorts” scrambling to exit in light of the intervention risk as highlighted above.

Let’s now highlight the short-term (1 to 3 days) trend bias and key technical levels to watch on the USD/JPY.

Bullish momentum is fading for USD/JPY, at risk of minor bearish reversal

Fig. 3: USD/JPY minor trend as of 16 Jan 2026 (Source: TradingView)

Fig. 4: USD/JPY major and medium-term trends as of 16 Jan 2026 (Source: TradingView)

The reintegration back below 158.30/158.35 on the USD/JPY, coupled with the bearish divergence condition and the bearish breakdown of its former parallel ascending support on the 1-hour RSI momentum indicator, suggests that a potential minor bearish reversal is brewing (see Fig. 3).

Watch the 159.45/159.75 short-term pivotal resistance on the USD/JPY. A break below 158.15 opens scope for a minor bearish reversal to expose the next intermediate supports at 157.50, 157.00 (20-day moving average), followed by 156.12 (50-day moving average).

On the other hand, a clearance above 159.75 invalidates the bearish scenario for a further squeeze up towards the next intermediate resistances at 160.24/160.35 and 161.00/161.10.

Market Overview

The crypto market has fallen 1.5% over the past 24 hours to $3.23 trillion as the market regains strength after the growth momentum at the beginning of the week. The top five cryptocurrencies by market capitalisation are down less than 1%, while smaller altcoins are experiencing more significant declines. The exception is Tron, which is up about 1% on the day and has been steadily gaining weight since the end of December.

Bitcoin is trading near $95.5K, retreating from levels near $98K, where the 61.8% Fibonacci retracement level also passes. The first cryptocurrency has reached the retracement line, waiting for further momentum to determine its direction. No critical macroeconomic publications are scheduled for the near future, so BTC will have to follow the highly unpredictable geopolitics and market reaction to quarterly reports.

News Background

Over the past three days, more than 47,000 retail investors have left the market due to fear, doubt and uncertainty. The price rebound was supported by a seven-month low in the volume of bitcoins on exchanges, according to Santiment.

The dynamics of the Value Days Destroyed indicator suggest that long-term holders are refraining from taking profits despite the rise in prices. The current growth is based on fundamental market strength rather than speculation, according to CryptoQuant.

According to CoinGlass, the total open interest in Bitcoin derivatives on all exchanges is now 28% below its peak in early October. A large-scale ‘cleansing’ of the market from excessive leverage could signal a recovery for BTC.

Despite the optimism, the derivatives segment has not yet entered a full-fledged growth phase, according to Greeks Live.

The recent growth was caused by a short squeeze in the futures market amid low trading volumes, rather than an influx of fresh capital, according to Glassnode. Despite the local positive, the options market signals that risks remain.

The US Securities and Exchange Commission (SEC) has closed a case initiated in August 2023 against the non-profit organisation Zcash Foundation, which is behind the development of the private coin.

Daily Pivots: (S1) 158.26; (P) 158.57; (R1) 158.94; More...

USD/JPY's retreat from 159.44 extends lower today. Intraday bias remains neutral for the moment, and deeper fall 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.

Yen is once again attempting to recover from its recent sharp losses, with momentum this time supported by a more forceful policy backdrop. Japanese authorities have stepped up verbal intervention, and crucially, officials have gone beyond routine warnings and have explicitly flagged the possibility of joint action with the US. Additionally, combined with speculation of earlier BoJ rate-hike , this has strengthened the perception that Japan is increasingly determined to defend the 160 level against Dollar.

That shift matters for positioning. After weeks of one-way yen selling, this week’s developments argue that Tokyo is no longer comfortable letting depreciation run unchecked. With that resolve now more visible, speculators may be reluctant to test the authorities aggressively in the near term, opening scope for a more sustained rebound in USD/JPY.

Japanese Finance Minister Satsuki Katayama reinforced the message on Friday, saying the government is ready to take “decisive action” to stem Yen’s continued fall. “I have repeatedly said that we will take every possible measure,” she told reporters. Katayama pointed specifically to last September’s joint statement with the US, emphasizing that its language on intervention was deliberate. Importantly, she stressed that the statement does not specify whether intervention must be coordinated, adding that “no options are excluded.”

Monetary policy expectations are also in flux. According to a Reuters report, some BoJ policymakers see scope for raising rates earlier than markets expect, with April under discussion if Yen weakness amplifies inflationary pressures. That view contrasts with broader market consensus. Analysts polled by Reuters still expect the BoJ to wait until July before hiking again, with more than 75% forecasting rates to reach 1% or higher by September. Still, the gap between official thinking and market pricing is narrowing.

Sources suggest some policymakers are willing to move sooner if evidence builds that Japan can sustainably meet its 2% inflation goal. The BoJ is also expected to revise up its fiscal 2026 growth and inflation projections at next week’s meeting, adding to the sense of policy optionality. That said, there remains no consensus within the policy board. Governor Kazuo Ueda has consistently signaled caution, stressing the need to assess how previous rate hikes affect a still-fragile economy before committing to faster normalization.

In FX performance terms this week, Kiwi remains the strongest, lifted again by robust domestic manufacturing data released today. Aussie follows, supported by stable risk sentiment, with Loonie third as it digests recent losses. Euro is the weakest, followed by the Swiss franc and then Yen, which has stabilized but not yet decisively turned. Sterling and Dollar are trading in the middle of the pack.

ECB’s Lane: Remarkably stable baseline leaves no near-term rate debate

ECB Chief Economist Philip Lane said the Eurozone is now in a “remarkably stable situation,” arguing there is "no near term interest rate debate" under the central bank’s baseline scenario. Speaking in an interview with La Stampa, Lane said the current policy setting is consistent with inflation staying around target, growth close to potential, and low, declining unemployment.

Lane stressed that the current level of interest rates provides the baseline for “the next several years.” With the economy expected to grow in the neighborhood of its potential rate, he said it would take a significant acceleration in activity to push outcomes meaningfully above the baseline and trigger a policy response.

One alternative scenario he flagged was a major global disruption similar to 2021–2022, involving supply-chain bottlenecks. Lane described this as a “nightmarish” outcome, noting it would also carry recessionary forces rather than a clean inflationary impulse.

NZ BNZ PMI surges to 56.1, a four-year high

New Zealand’s manufacturing sector ended 2025 on a strong footing, with the BusinessNZ Performance of Manufacturing Index jumping sharply from 51.7 to 56.1 in December. The reading marked the highest level of activity since December 2021 and moved decisively above the long-run average of 52.5.

The rebound was broad-based. Production rose from 53.2 to 57.4, while new orders surged from 52.5 to 59.8, pointing to strong demand momentum. Employment also improved, climbing from 52.6 to 53.8, suggesting firms are beginning to respond to higher workloads. Positive commentary from respondents increased to 57.1%, up from 54.4% in November and just 45.9% in October.

BNZ Senior Economist Doug Steel said the PMI is positive for Q4 GDP calculations and points to good momentum heading into the new year, flagging "upside risks" to already constructive near-term growth forecasts.

USD/JPY Daily Outlook

Daily Pivots: (S1) 158.26; (P) 158.57; (R1) 158.94; More...

USD/JPY's retreat from 159.44 extends lower today. Intraday bias remains neutral for the moment, and deeper fall 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.

ECB Chief Economist Philip Lane said the Eurozone is now in a “remarkably stable situation,” arguing there is "no near term interest rate debate" under the central bank’s baseline scenario. Speaking in an interview with La Stampa, Lane said the current policy setting is consistent with inflation staying around target, growth close to potential, and low, declining unemployment.

Lane stressed that the current level of interest rates provides the baseline for “the next several years.” With the economy expected to grow in the neighborhood of its potential rate, he said it would take a significant acceleration in activity to push outcomes meaningfully above the baseline and trigger a policy response.

One alternative scenario he flagged was a major global disruption similar to 2021–2022, involving supply-chain bottlenecks. Lane described this as a “nightmarish” outcome, noting it would also carry recessionary forces rather than a clean inflationary impulse.

New Zealand’s manufacturing sector ended 2025 on a strong footing, with the BusinessNZ Performance of Manufacturing Index jumping sharply from 51.7 to 56.1 in December. The reading marked the highest level of activity since December 2021 and moved decisively above the long-run average of 52.5.

The rebound was broad-based. Production rose from 53.2 to 57.4, while new orders surged from 52.5 to 59.8, pointing to strong demand momentum. Employment also improved, climbing from 52.6 to 53.8, suggesting firms are beginning to respond to higher workloads. Positive commentary from respondents increased to 57.1%, up from 54.4% in November and just 45.9% in October.

BNZ Senior Economist Doug Steel said the PMI is positive for Q4 GDP calculations and points to good momentum heading into the new year, flagging "upside risks" to already constructive near-term growth forecasts.

Full NZ BNZ PMI release here.

Markets

Geopolitical tensions yesterday receded as a driver for global trading. President Trump taking a more guarded tone regarding direct action against Iran halted the recent upward squeeze in the oil price. Brent returned below $64/b. The ‘safe haven/scarcity‘ rally in gold and sliver that recently also spilled-over to other industrial metals (copper, thin,…) also fell prey to some profit taking. It has often been different of late, but in this (temporary?) more benign geopolitical context, US eco data even play a role in intraday price action. US weekly jobless claims (198k) eased back to sub 200k levels. The New York Fed Empire manufacturing survey (7.7 from -3.7, with strong orders and shipments) and the Philly Fed business outlook (12.6 from -8.8 also with solid underlying details) printed strong. These series are no game-changers regarding the broader eco picture and their message still can be contradicted by other more high profile releases. Still, they confirm the view that the Fed is right in its assessment that the US economy is holding up rather well and that no immediate stimulus is needed, especially not as inflation is holding above target. After a risk-off driven bull flattening on Wednesday, the US yield curve yesterday bear flattened with yields rising between 5.5 bps (2 & 5 y) and 1.2 bps (30-y). Moves in Europe stayed more benign with the German 2-y yield adding 2.6 bps. The 30-y still eased 1.8 bps. Decent data and some easing in geopolitical tensions was enough to inspire a bid on global equity markets (Dow & Eurostoxx +0.6%). Still the dollar outperformed (DXY close 99.3) EUR/USD is struggling not to fall below the 1.16 barrier. The yen-decline took a breather after the announcement of new elections (USD/JPY 158.6), but the (yen)-picture remains fragile. UK yields rebounded 3.5-5.5 bps across the curve on better UK monthly GDP/production data, but it didn’t help further sterling gains. EUR/GBP even rebounded from the 0.8650/55 support area to close at 0.8675.

Asian equities show a mixed picture today, with Japan and China suffering modest losses. US futures are gaining slightly (S&P +0.3%). The dollar is holding its recent gains (DXY 99.35, EUR/USD 1.1605). The eco calendar again only contains second tier eco data (NY Fed services activity, US production data, NAHB housing index). US markets are also preparing for a long weekend (Martin Luther King Day on Monday). A long weekend in the current uncertain (geopolitical) context might cause some cautious positioning. The technical picture in the likes of DYX and EUR/USD (break above 99.25 and below 1.161) at least suggests an ongoing constructive USD-momentum for now.

News & Views

The European Commission in reviewing the EU accession rules is considering to replace the current system with a two-tier model, the Financial Times reported. Under the current 30-yr old system, an EU member state candidate can only enter when it ticks all the boxes, including adopting huge amounts of EU regulation. The new model under discussion would allow for fast-tracking a candidate’s entry. After joining, the country would hold far less decision-making power, stripped from voting rights at leaders’ summits for example, and gain incremental access to parts of the bloc’s single market as well as funding and subsidies, after meeting post-membership milestones. The proposal is specifically being considered for Ukraine. As part of the US-led peace plan, the country is allowed to join the EU. But officials note it could take a decade of reform for Ukraine to meet the current EU accession rules and understand that president Zelenskyy can probably only accept other parts of the peace deal (including territorial concessions) if he has short-term EU membership to showcase in return. The EC’s proposal is highly contentious with some fearing it waters down the value of membership and may undermine stability in the bloc.

The US and Taiwan signed a trade agreement yesterday that slashes the current 20% tariff rate on Taiwanese imports to 15%. That’s in line with regional peers including Japan and South Korea. The deal also waives tariffs on generic drugs, aerospace parts and natural resources that are unavailable in the US and offers Taiwan a most-favoured nation treatment. In return, Taiwan pledges a $250bn investment in the chip industry in the US and tariff-free imports of chips to the US are subject to a quotum. President Trump has previously threatened to impose a 100% levy on semiconductors, which would significantly weigh on Tawain as being the world’s most important producer. Some in Taiwan, however, criticize the agreement as moving the chip industry out of the country and thereby disincentivizing Washington to protect Tapei against a possible Chinese attack.