DBS Group Research analyst Philip Wee discusses the recent dynamics of the USD/JPY amid a global USD sell-off initiated by Japan-centric policy risks. The report highlights the significance of the 50-day moving average and the upcoming FOMC meeting, which may influence the USD’s trajectory. 🔗 Source 💡 DMK Insight The USD/JPY is at a critical juncture, and here’s why that matters: With the recent global USD sell-off, driven largely by Japan’s policy risks, traders need to keep a close eye on the 50-day moving average. This level often acts as a support or resistance point, and a break below could signal further weakness in the USD against the JPY. The upcoming FOMC meeting is another key event that could sway USD sentiment, especially if the Fed hints at a shift in monetary policy. If the Fed maintains a hawkish stance, it could provide a temporary boost to the USD, but if they lean dovish, expect the USD/JPY to face more downward pressure. It’s also worth noting that this dynamic might ripple through other currency pairs, particularly those correlated with the USD, like AUD/USD or EUR/USD. Traders should watch for volatility spikes as the FOMC meeting approaches, and consider positioning themselves based on how the market reacts to the Fed’s statements. Keep an eye on the 50-day moving average for immediate trading signals, as it could dictate short-term strategies. 📮 Takeaway Monitor the USD/JPY around the 50-day moving average and prepare for volatility ahead of the FOMC meeting.

Deutsche Bank Research highlights the impact of higher geopolitical volatility on commodity prices, particularly Gold. The report suggests that Gold’s continued rise is driven by persistent investment motives, with expectations of reaching USD 6,000/oz this year. 🔗 Source 💡 DMK Insight Gold’s potential surge to USD 6,000/oz isn’t just a number—it’s a reflection of rising geopolitical tensions and inflation fears. As geopolitical volatility escalates, traders should keep a close eye on Gold’s price movements, especially if it breaks above key resistance levels. Historically, Gold tends to thrive in uncertain times, and with investment motives shifting towards safe havens, we could see increased buying pressure. If Gold approaches significant levels, like USD 2,000/oz, it could trigger a wave of momentum trading. But here’s the flip side: if geopolitical tensions ease or if the Fed signals a more hawkish stance, we might see a sharp pullback. So, watch for these dynamics. In the coming weeks, keep an eye on the USD and broader commodity trends, as they could influence Gold’s trajectory. A close above USD 2,000/oz could set the stage for that ambitious USD 6,000/oz target, but volatility is likely to remain high, so manage your risk accordingly. 📮 Takeaway Watch for Gold’s price action around USD 2,000/oz; a breakout could signal a run towards USD 6,000/oz amid rising geopolitical tensions.

The EUR/USD has seen a rebound due to broad-based US Dollar weakness and easing political risks in France. The pair is approaching last year’s high of 1.1919, with a potential break above this level opening the door for a rise above 1.2000. 🔗 Source 💡 DMK Insight The EUR/USD rebound signals a critical moment for traders as it approaches last year’s high of 1.1919. With the US Dollar losing ground, driven by broader economic concerns, and political stability returning in France, this pair could see significant upward momentum. A breakout above 1.1919 not only confirms bullish sentiment but could also trigger a rush towards 1.2000, a psychological level that many traders will be watching closely. Keep an eye on the daily chart for any bullish patterns or volume spikes that could signal a strong move. However, it’s worth noting that if the Eurozone faces any unexpected economic data or geopolitical tensions, we could see a quick reversal. Traders should monitor the upcoming economic indicators from both the US and Eurozone, as well as any shifts in market sentiment that could impact the Dollar’s strength. The next few sessions will be crucial, so stay alert for any signs of volatility around these key levels. 📮 Takeaway Watch for a breakout above 1.1919 in the EUR/USD; a close above this level could lead to a rally towards 1.2000.

United Kingdom NIESR GDP Estimate (3M): 4.296% (December) vs -0.1% 🔗 Source 💡 DMK Insight The UK’s NIESR GDP estimate of 4.296% for December is a surprising uptick, and here’s why it matters now: This figure contrasts sharply with the previous -0.1%, signaling a potential shift in economic momentum. For traders, this could influence the GBP/USD pair significantly, especially if the market interprets this as a sign of resilience in the UK economy. A stronger GDP could lead to speculation around the Bank of England adjusting interest rates sooner than expected, which would further impact currency valuations. Watch for reactions in the forex market, particularly around key resistance levels for the pound. If GBP/USD breaks above recent highs, it could trigger a bullish trend. But don’t overlook the flip side—if this growth is seen as temporary or driven by one-off factors, the market might quickly recalibrate. Keep an eye on upcoming economic indicators and sentiment shifts. The real test will be how sustainable this growth appears in subsequent reports. Monitor the 1.30 level in GBP/USD closely; a breach could signal a new trading opportunity. 📮 Takeaway Watch for GBP/USD reactions around the 1.30 level; a breakout could signal a bullish trend based on the strong GDP estimate.

The Euro nudged up from six-week lows, right below 182.00 against the Yen on Tuesday, as convictions about a BoJ-Fed intervention start to fade, but met resistance at the 183.65 area before pulling back to levels right below 183.00 at the time of writing. 🔗 Source 💡 DMK Insight The Euro’s bounce from six-week lows against the Yen signals shifting market sentiment, but resistance at 183.65 is a key hurdle. Traders should note that the fading expectations of a Bank of Japan and Federal Reserve intervention are influencing this price action. With the Euro currently hovering just below 183.00, the failure to break above 183.65 could lead to a deeper pullback, especially if broader market dynamics shift towards risk aversion. Keep an eye on the 182.00 support level; a break below could trigger further selling. Additionally, the correlation between the Euro and Yen with U.S. Treasury yields is worth monitoring, as any uptick in yields could pressure the Euro further. Here’s the thing: if the Euro can’t reclaim that 183.65 level soon, it might be time to reassess long positions. Watch for any news from the BoJ or Fed that could shift sentiment quickly. 📮 Takeaway Watch the 183.65 resistance level closely; a failure to break above could signal a bearish reversal for the Euro against the Yen.

The Euro (EUR) remains practically flat on the daily chart on Tuesday, trading at 1.1880 at the time of writing, with downside attempts limited above 1.1850. 🔗 Source 💡 DMK Insight The Euro’s stagnation around 1.1880 signals a crucial moment for traders. With the currency hovering just above 1.1850, a breakdown could trigger a wave of selling, especially if broader market sentiment shifts. Traders should keep an eye on economic indicators from the Eurozone, as any negative data could push the Euro lower, potentially testing support levels around 1.1800. Conversely, if the Euro manages to break above 1.1900, it could attract bullish momentum, leading to a rally. This flat performance is also reflective of the market’s cautious stance ahead of upcoming central bank announcements, which could further influence the Euro’s trajectory. Watch for volatility spikes around these events, as they could create trading opportunities. Remember, the Euro’s movement is often correlated with the USD, so monitor the dollar index closely for additional context. 📮 Takeaway Watch for a potential breakdown below 1.1850 or a breakout above 1.1900 to guide your trading strategy.

The GBP/USD pair struggles to find acceptance or build on its gains beyond the 1.3700 mark for the second consecutive day and edges lower during the early part of the European session on Tuesday. The downside, however, remains cushioned, with spot prices holding above mid-1.3600s. 🔗 Source

The National Bank of Hungary is expected to maintain rates at 6.50% in its upcoming meeting, with a potential rate cut anticipated in February. Analysts at ING note that the market sees a 60/40 chance in favor of a rate cut, influenced by January inflation data. 🔗 Source 💡 DMK Insight The Hungarian central bank’s decision to hold rates at 6.50% is a critical moment for traders, especially with a potential cut looming in February. This stability reflects a cautious approach amid fluctuating inflation data, which analysts believe could sway the bank’s future decisions. A 60/40 chance of a rate cut suggests that traders should keep a close eye on January’s inflation figures, as they could trigger volatility in the HUF and related assets. If inflation comes in lower than expected, it could bolster the case for a rate cut, impacting forex pairs like EUR/HUF. Conversely, higher inflation might solidify the current rate, leading to a stronger HUF. Traders should monitor the upcoming inflation release closely, as it could set the tone for the market in the short term. Key levels to watch include the 6.50% rate and any significant shifts in inflation expectations, which could lead to rapid adjustments in positions across the forex market. 📮 Takeaway Watch January’s inflation data closely; a lower reading could trigger a rate cut and impact EUR/HUF significantly.

Deutsche Bank Research forecasts a sustained incentive price regime for Copper, driven by inelastic mine supply and electrification-linked demand. The report anticipates a quarterly peak of $13,000/t in Q2, followed by moderation in prices as production recovers at major mines. 🔗 Source 💡 DMK Insight Copper’s projected peak at $13,000/t in Q2 is a game-changer for traders: The forecast from Deutsche Bank highlights a crucial intersection of supply constraints and rising demand due to electrification. With mine supply being inelastic, any disruptions could push prices even higher before the anticipated moderation kicks in. Traders should keep an eye on production reports from major mines, as any delays or issues could lead to price spikes. Moreover, this scenario could ripple through related markets, particularly in sectors like renewable energy and electric vehicles, where copper is a key component. If you’re trading copper futures or ETFs, watch for resistance levels around $13,000/t and be prepared for volatility as the market reacts to supply news. The real story is how quickly production can ramp up; if it lags, we could see prices sustain above forecasts longer than expected. For now, keep an eye on Q2 developments and any shifts in mine output, as these will be critical in shaping the copper market’s trajectory. 📮 Takeaway Watch for copper prices around $13,000/t in Q2; any production delays could lead to sustained highs before a potential correction.

Brown Brothers Harriman’s (BBH) report indicates that the USD continues to trade defensively, with expectations for the dollar index (DXY) to hold above its July and September 2025 lows. 🔗 Source 💡 DMK Insight The USD’s defensive stance is crucial for traders, especially with the dollar index (DXY) expected to maintain support above its July and September 2025 lows. This suggests a potential floor for the DXY, which could influence forex pairs, particularly those involving the euro and yen. If the DXY holds above these levels, it may deter aggressive selling, leading to a more stable trading environment. Traders should keep an eye on economic indicators that could affect dollar strength, like upcoming inflation data or Fed announcements. A failure to hold these support levels could trigger a wave of selling, impacting not just the USD but also commodities priced in dollars, like gold and oil. It’s worth noting that while the DXY’s current position seems stable, any unexpected shifts in monetary policy or geopolitical tensions could quickly change the narrative. So, watch for any signs of volatility in the forex market that could signal a shift in sentiment. 📮 Takeaway Monitor the DXY closely; if it holds above its July and September 2025 lows, it could stabilize the USD, impacting major forex pairs.