China and the UK struck a conciliatory tone in Beijing, hinting at a cautious reset after years of strained ties.Info via Reuters. Summary:China’s President Xi Jinping met UK Prime Minister Keir Starmer in Beijing, signalling a bid to stabilise bilateral ties.Starmer said the UK wants a “more sophisticated” relationship with China and to re-engage globally.Xi acknowledged recent “twists and turns” in relations and called for greater dialogue and long-term consistency.Both sides framed the meeting as forward-looking, while acknowledging underlying differences.The optics point to a tentative reset, though substance will depend on follow-through.Chinese President Xi Jinping met with UK Prime Minister Keir Starmer in Beijing on Wednesday, in a closely watched encounter that signalled a potential recalibration of relations after several years of strain.Speaking during the meeting, Starmer said Britain wanted a “more sophisticated” relationship with China, describing the country as a vital player on the global stage. He said his visit reflected a commitment to making the UK more outward-facing and engaging pragmatically with major international partners, with the interests of the British public in mind.Xi struck a conciliatory tone, saying China stood ready to develop a long-term and consistent strategic partnership with the UK. He acknowledged that bilateral ties in recent years had experienced “twists and turns” that did not serve the interests of either country, and said enhanced dialogue between Beijing and London was now imperative.Referencing historical ties, Xi noted that previous Labour governments had made important contributions to the development of China-UK relations, a remark widely interpreted as a nod to continuity and institutional memory rather than ideology. He urged both sides not to shy away from difficulties, but instead to press ahead with fortitude, respect differences and take a broad strategic perspective.Xi described Starmer’s visit as a “sign of auspiciousness,” adding that mutual respect and a willingness to rise above disagreements would allow the relationship to stand the test of history.While the rhetoric was notably warm, analysts cautioned that the meeting appeared more about stabilisation than breakthrough. Long-standing points of friction, including trade imbalances, security concerns and geopolitical alignment, remain unresolved.For markets and policymakers, the encounter suggests a gradual shift toward engagement rather than confrontation. Whether this translates into tangible policy outcomes will depend on follow-up actions, but the messaging points to a shared desire to reset the tone after years of volatility. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight China and the UK’s recent diplomatic thaw could shift market dynamics significantly. As Xi Jinping and UK Prime Minister Keir Starmer discuss a more stable relationship, traders should keep an eye on how this affects trade flows and currency valuations. A stronger UK-China relationship might lead to increased investments and trade agreements, which could bolster the British pound against other currencies. If you’re trading forex, watch for GBP/USD movements, especially if it breaks above key resistance levels. Additionally, commodities linked to China, like copper or oil, could see price adjustments based on renewed demand expectations. But here’s the flip side: geopolitical tensions can be unpredictable. If this reset is perceived as superficial or if underlying issues resurface, we might see a quick reversal in market sentiment. Keep an eye on economic indicators from both countries, as they could provide clues on the sustainability of this diplomatic shift. Watch for any announcements related to trade agreements or economic collaborations in the coming weeks. 📮 Takeaway Monitor GBP/USD for potential breakouts and watch for trade agreement announcements that could impact market sentiment.

New York Times (gated):Trump, Schumer move toward possible deal to avert shutdownTrump, Schumer deal sees DHS funding split from packageDemocrats have objected to funding DHS due to the murders of US citizens by ICE, amongst other crimes. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight The potential deal between Trump and Schumer to avert a government shutdown is significant for traders, especially those in sectors sensitive to government spending. If the Department of Homeland Security (DHS) funding is split from the broader package, it could signal a shift in fiscal policy that impacts market sentiment. Traders should be aware that a shutdown could lead to volatility in the stock market, particularly in sectors like defense and security, which often rely on government contracts. Moreover, the ongoing objections from Democrats regarding DHS funding highlight a growing divide in fiscal priorities, which could lead to further political instability. This situation is reminiscent of past shutdowns where uncertainty led to market pullbacks, making it crucial to monitor key economic indicators and sentiment shifts. Watch for any announcements regarding the deal’s progress, as they could trigger immediate market reactions. Key levels to observe include the S&P 500’s support around recent lows, which could be tested if negotiations falter. Traders should keep an eye on the news cycle and prepare for potential volatility as the deadline approaches, especially in relation to sectors directly impacted by government funding decisions. 📮 Takeaway Monitor the S&P 500’s support levels closely as negotiations unfold; a failure to reach a deal could trigger significant market volatility.

Reports that Trump and Schumer are approaching a possible deal to avert shut downXi and Starmer signal thaw as China and UK seek steadier bilateral tiesChina property shares jump on report of easing “three red lines” rulesGoldman Sachs and Deutsche Bank forecast Reserve Bank of Australia on hold next weekReuters poll: RBI seen holding rates at 5.25% as focus shifts to liquidity and rupeeMUFG, CBA see February RBA rate hike as inflation lifts and AUD finds supportBanks lift gold forecasts as $6,000/oz targets emerge after record rallyPBOC sets USD/ CNY mid-point today at 6.9771 (vs. estimate at 6.9521)ICYMI – Tesla to end Model S and X production as Musk shifts focus to robots and autonomyAustralia’s Q4 trade prices lift terms of trade as export prices reboundNZ business confidence eases from record highs as activity holds firm, inflation liftsSingapore MAS hold policy steady, maintains S$NEER appreciation as inflation outlook liftsGold new record high above $5400 … wait … above $5500 … $5550ING sees February RBA rate hike after CPI upside surprise keeps inflation above targetUBS reiterates 7,700 S&P 500 target, says Fed easing to stay equity tailwindGerman Chancellor Merz warns weak dollar is hurting exporters, backs push for digital euroNew Zealand December 2025 trade balance +52mn NZD (vs. +30mn NZD expected)Tesla Q4 2025: adjusted EPS beats, margins jump; revenue misses, free cash flow fall shortMicrosoft Q2 FY2026 beats estimates; Intelligent Cloud tops views as Azure grows 38% ex-FXMeta Q4 2025 Earnings Beat on Ads, Reality Labs Loss Widens; Capex Outlook RaisedinvestingLive Americas market news wrap: Fed and BOC holds rates with minimal dramaAt a glance:Gold exploded to fresh record highs, surging above $5,580 before violent two-way volatility set in.AUD and NZD hit multi-year highs, driven by RBA hike chatter and supportive China property news.USD weakened broadly, with EUR, GBP, JPY, CHF and CAD all firmer on the session.Singapore policy was unchanged, with MAS maintaining its S$NEER settings.Equities diverged sharply, with Indonesia plunging into correction territory while China property stocks surged.Gold delivered one of its most dramatic sessions in years, surging sharply in early Asia trade to a fresh record above $5,400, before accelerating further to trade north of $5,580. The rally peaked around $5,588 in morning trade before violent volatility set in, with prices plunging back toward $5,450 before rebounding again above $5,540 as this update was written.Geopolitical uncertainty continues to underpin structural demand for gold, but the sheer scale and speed of the early-session surge suggests additional dynamics at play. With prices jumping more than $200 in a matter of hours, the risk of forced positioning adjustments appears elevated, and it would not be surprising if reports of fund or manager stress (blow ups) emerge in coming days.In FX markets, the Australian dollar pushed to a fresh three-year high as speculation around a potential RBA rate hike intensified. The New Zealand dollar also climbed to a seven-month peak. Both currencies found further support later in the session following news of regulatory easing in China’s property sector, which lifted broader China-linked risk sentiment.The US dollar weakened across the board, with EUR, GBP, JPY, CHF and CAD all advancing against the greenback.In Asia policy news, the Monetary Authority of Singapore kept monetary settings unchanged, maintaining the prevailing rate of appreciation and configuration of the S$NEER policy band.In corporate headlines, Tesla said it will phase out production of its Model S and X vehicles next quarter and retool its Fremont plant for humanoid robot manufacturing, marking a strategic shift toward robotaxis and AI.Equity markets diverged sharply. Goldman Sachs downgraded Indonesian equities to underweight, warning of potential forced outflows exceeding $13bn if index status changes. Indonesian stocks plunged for a second straight day, with the benchmark index falling over 10% and entering correction territory amid panic selling.By contrast, Chinese property shares surged after reports developers no longer need to submit “three red lines” leverage metrics. Sunac jumped 25%, lifting sector sentiment and adding further support to the AUD. Asia-Pac stocks: Japan (Nikkei 225) +0.22%Hong Kong (Hang Seng) +0.54% Shanghai Composite -0.1% (property & metals gains offset by tech losses)Australia (S&P/ASX 200) -0.32% This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight Political maneuvering in the U.S. could impact market sentiment significantly right now. With Trump and Schumer nearing a deal to prevent a government shutdown, traders should watch for potential volatility in U.S. equities as this could influence risk appetite. A stable political environment often leads to increased investment in riskier assets, so expect a ripple effect across sectors. Meanwhile, the thawing relations between China and the UK could bolster trade-related stocks, especially in the commodities sector, as improved ties often lead to increased demand. The jump in Chinese property shares due to easing regulations indicates a potential recovery in that market, which could affect global commodities and related equities. Traders should keep an eye on the Reserve Bank of Australia’s upcoming decision, as a hold could signal stability in the Asia-Pacific region, impacting AUD pairs. Watch for key levels in major indices and commodities as these developments unfold, particularly any shifts in sentiment leading up to the RBA meeting next week. 📮 Takeaway Keep an eye on U.S. political developments and the RBA’s decision next week, as they could trigger volatility in equities and commodities.

It’s tough luck for the dollar as it got kicked when it is down, after US president Trump said earlier this week that the currency is “doing great” and that “I don’t think the dollar has declined too much”. That kind of endorsement speaks volumes and it won’t help to turn around the deteriorating sentiment in the greenback since last year.The main drivers beating down the dollar are all still in play. Incoherent trade policy and tariffs approach? Check. Erratic and uncertain geopolitical policy administration? Check. Federal Reserve independence being undermined? Check. Currency debasement flows amid rising fiscal concerns globally? Check.Those are just some key reasons why the dollar is being dragged to the depths of the ocean since last year already. And all of that is still in play this year.So far today, the pressure is back on with EUR/USD rising up 0.3% to 1.1990 and taking another look at the key 1.2000 mark. This week’s levels are still the highest since June 2021 for the currency pair. Meanwhile, USD/CHF is back down by 0.4% to 0.7650 and eyeing fresh 15-year lows again. And following a hot Australian inflation report yesterday, AUD/USD is up 0.7% today to 0.7090 now – its highest in two years.And all of this is not even coming close to the biggest and most significant mover today, that again being precious metals. Gold is up 2.5% today and over 11% this week to $5,555 currently with the high earlier coming close to clip the $5,600 mark. It’s wild that at the end of last week, we were still talking about whether $5,000 would be the limit. And suddenly, here we are. Once again, it speaks to the trading truth that it is a fool’s errand to be calling tops and/or catching falling knives.Meanwhile, silver is also up over 1% to a fresh record above $118. Unrelenting. This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight So Trump’s recent comments on the dollar might seem supportive, but here’s the kicker: they could actually signal a lack of concern about its weakening. When a president feels the need to publicly declare the dollar’s strength, it often means the opposite is true. Traders should be wary—this could lead to further volatility in forex markets, especially if economic indicators don’t align with his optimism. Look at the broader context: the dollar index has been under pressure due to rising inflation and interest rate uncertainties. If the dollar continues to weaken, it could trigger a flight to safer assets like gold or even cryptocurrencies, which have historically benefited in such scenarios. Keep an eye on key support levels for the dollar index; a break below recent lows could accelerate selling pressure. Conversely, if the dollar manages to hold its ground, it might attract short-covering from those betting against it. Here’s why this matters: if you’re trading forex, watch for any shifts in sentiment around the dollar, especially as we approach upcoming economic data releases. They could provide the catalyst for a significant move in the market. 📮 Takeaway Monitor the dollar index closely; a break below recent support could lead to increased volatility and a shift towards safe-haven assets.

It was quite a day of events yesterday, not least with the central bank bonanza in having the Bank of Canada and Federal Reserve policy decisions. In any case, both went pretty much straightforward with Fed chair Powell also not really offering much and markets are already looking ready to phase him out it seems. As such, the reactions to the central bank decisions were rather muted.Instead, we had US Treasury secretary Bessent out with some notable remarks here and that was arguably much more impactful. Meanwhile, precious metals continued to be on the move and are at it again today with this report from Bloomberg raising some eyebrows. It seems that it isn’t just central banks that are buying up gold in sizable amounts.As for key earnings releases after the close, big tech were in focus with three of the Magnificent 7 reporting:At the balance, it is keeping tech shares slightly elevated with S&P 500 futures up 0.1% and Nasdaq futures up 0.3% currently.Despite all that, there’s still much to play for before we look to wrap up the final trading week of January.In terms of data releases, we still have the US weekly initial jobless claims today and then PPI data tomorrow.And speaking about 30 January, do be reminded that we do have a deadline for the US government to avoid another shutdown drama. From earlier this week: Another shutdown looms large after Democrats pull support for government funding billThat said, the latest news is that it could still be avoided with Trump and Schumer working towards a deal to exclude DHS funding from the overall funding package. So, there’s that at least.Circling back to yesterday’s Fed decision, we didn’t hear from Trump on who he will be appointing to replace Powell as Fed chair. It would’ve been a timely opportunity for him to take a jab at the Fed at the same time but alas, it wasn’t to be. Instead, Bessent noted that we are likely to hear from Trump on his choice some time next week.And in terms of key earnings releases, there are still a couple of big names to watch out for in the day ahead. Of note, Apple is the other big tech name set to report after the close today. Then, there’s also Visa and Mastercard also reporting on Thursday. Come tomorrow, we do have Exxon Mobil, Chevron, Amex, and Verizon on the earnings calendar.Besides all of this, there will be continued focus on the US dollar selling, Japanese yen intervention risks, precious metals buying, and not to forget month-end flows/shenanigans that could creep in. On the final point, it typically catches on during the London fix but can also see some exacerbated and sudden flows at any time in the final day(s) before the month officially closes. This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight With ADA at $0.35, traders should pay attention to how central bank decisions ripple through crypto markets. The recent policy announcements from the Bank of Canada and the Federal Reserve have set a cautious tone, and ADA’s current price reflects that uncertainty. While Powell’s comments were non-committal, they indicate a wait-and-see approach that could lead to increased volatility in the coming days. If ADA can hold above $0.34, it might signal a short-term bullish trend, but a drop below could trigger further selling pressure. Look for correlations with Bitcoin and Ethereum, as their movements often influence altcoins like ADA. The next few days will be crucial; monitor trading volumes and sentiment shifts. If ADA breaks above $0.36, it could attract more buyers, while a failure to maintain current levels might lead to a retest of lower support around $0.32. 📮 Takeaway Watch ADA closely; a break above $0.36 could signal bullish momentum, while a drop below $0.34 may trigger selling pressure.

There are no major expiries to take note of on the day, with the full list seen below.It’s the same scenario that we’ve been facing for the past few days now. Trading sentiment is going to be all about the other key drivers more so than anything else. That being the prevailing weakness in the US dollar, bids into precious metals, and potential intervention risks with regards to the Japanese yen.The first two points remain very much in play with the dollar falling back again today. The brief respite yesterday is what it the name implies, with dollar sentiment still down in the dumps. Meanwhile, precious metals continue to soar with gold eyeing a push to $5,600 now and silver briefly clipping the $120 mark earlier. Up, up, and away.As for yen-tervention risks, that has cooled modestly over the last few sessions. Tokyo stepped in one more time on Tuesday with a suspected ‘rate check’ again, sending USD/JPY down below its 100-day moving average. And that has knocked the wind out of dip buyers this week. The key level is seen at 153.71 still, so that will be a notable line in the sand to be wary of with the pair trading down to 153.00 currently.There will be bigger fish to fry from the expiries list tomorrow, mainly for EUR/USD. However, they sit on the lower side of things between 1.1800 to 1.1900. Amid the dollar rout, it may be tough to see those expiries come into play unless we get a pullback in the dollar selling.And also don’t forget about month-end flows creeping into play in the sessions to come before the weekend comes along.For more information on how to use this data, you may refer to this post here.Head on over to investingLive (formerly ForexLive) to get in on the know! This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight With no major expiries today, traders need to focus on external drivers influencing market sentiment. This ongoing scenario suggests that volatility might stem from macroeconomic factors or geopolitical events rather than typical expiry-related movements. For day traders and swing traders, this means keeping an eye on economic indicators like inflation reports or central bank announcements that could sway market direction. Additionally, the lack of expiries might lead to thinner trading volumes, increasing the potential for erratic price movements. It’s worth noting that when markets are less influenced by expiries, they can react more sharply to news, so staying updated on global events is crucial. Watch for any shifts in sentiment that could impact correlated assets, such as commodities or equities, as these can often provide clues about crypto and forex movements. In the coming days, monitor key economic releases and be prepared for potential breakouts or reversals as traders react to the broader market context. 📮 Takeaway Keep an eye on macroeconomic indicators and geopolitical events, as they could drive volatility in the absence of major expiries.

EUROPEAN SESSIONIn the European session, we don’t have much on the agenda other than a few low tier releases that won’t change anything for the ECB or the market. Policymakers are now focused on the euro strength and how that is going to impact inflation going forward. We already had a softer than expected inflation report last month and if that’s going to continue with euro at these levels, the market might start to price in a rate cut before year-end.AMERICAN SESSIONIn the American session, we get a few low tier releases like the US trade balance and US Factory Orders but the focus will be on the US Jobless Claims figures. Initial Claims are expected at 205K vs 200K prior, while Continuing Claims are seen at 1850K vs 1849K prior. We’ve been seeing notable improvements in the US Jobless Claims data that seem to suggest a pickup in labour market activity.Another strong report might trigger a bit of a hawkish repricing as we head into the US NFP report next week. That could support the dollar in the short-term given the recent selloff. CENTRAL BANK SPEAKERS14:30 GMT/09:30 ET – ECB’s Cipollone (neutral – voter) This article was written by Giuseppe Dellamotta at investinglive.com. 🔗 Source 💡 DMK Insight The ECB’s focus on euro strength is a critical signal for traders navigating inflation risks. With low-tier releases on the agenda, the market’s attention shifts to how a stronger euro could dampen inflationary pressures. This could influence ECB policy decisions, especially if the euro continues to appreciate. Traders should keep an eye on the EUR/USD pair, as any significant moves could trigger volatility in related markets, particularly commodities priced in euros. If the euro strengthens further, it might lead to a reassessment of inflation forecasts, impacting interest rate expectations. Watch for key technical levels around recent highs, as a break could signal a stronger trend. Conversely, if the euro weakens, it could prompt a shift in ECB rhetoric, leading to potential buying opportunities in euro-denominated assets. Overall, the interplay between euro strength and inflation is something to monitor closely in the coming sessions. 📮 Takeaway Keep an eye on the EUR/USD pair; a break above recent highs could signal a stronger euro and impact inflation expectations.

investingLive will take part in iFX EXPO Dubai 2026, where traders will have the opportunity to attend live trading sessions led by Greg Michalowski, our Director of Client Education and Technical Analysis.Taking place from 10–12 February 2026 at the Dubai World Trade Centre, iFX EXPO Dubai will host the Trading Festival, featuring a six-hour live trading masterclass by investingLive, comprising two in-person workshops designed for both beginner and experienced traders.Beginner Workshop: Trading Fundamentals📅 11 February | Trading Festival (Investing Hub)This workshop is for traders who want a strong foundation and a clear framework for thinking about trading.Beginner Workshop Session timesSession 1: 11:30 – 13:00Session 2: 14:00 – 15:30What you will learnHow trading decisions are madeHow to build good habits from the startHow to plan a trade before you enterHow to avoid common beginner mistakesSession formatLive presentationStep-by-step explanationsInteractive quizOpen Q&ACertificate: Traders who attend both sessions on 11 February will receive a Certificate by investingLive, confirming their training and participation.Advanced Workshop: Trade Execution Mastery📅 12 February | Trading Festival (Investing Hub)This workshop is designed for experienced traders seeking greater control and consistency in their trading.Session timesSession 1: 11:30 – 13:00Session 2: 14:00 – 15:30What you will learnHow to stay focused during live marketsHow to manage risk during active tradesHow to improve entries and exitsHow to review trades with clear rulesTopics includeKey technical levelsTimeframe selectionRisk control during executionTrade management and exitsCertificate: To receive the Advanced Workshop Certificate, you must attend both sessions on 12 February.You do not need to attend the beginner workshop to qualify.👉 If you attend both workshops, you will receive two separate certificates.Message from Greg Michalowski Trading Education at iFX EXPO Dubai 2026The trading workshops led by Greg Michalowski at iFX EXPO Dubai 2026 are suitable for traders who want:Clear trading structureBetter trade decisionsStronger disciplineA repeatable trading approachThe investingLive team looks forward to welcoming attendees to our 2 exclusive workshops.Not registered for iFX EXPO Dubai 2026 yet?Register to attend the Trading Festival, take part in Greg’s workshops and get Certified by investingLive.[REGISTER NOW] This article was written by investingLive at investinglive.com. 🔗 Source 💡 DMK Insight The upcoming iFX EXPO Dubai in February 2026 is a pivotal event for traders looking to enhance their skills and network. With live trading sessions led by Greg Michalowski, participants can expect to gain valuable insights into market trends and technical analysis strategies that could influence their trading decisions. This expo not only serves as a platform for education but also as a networking hub, allowing traders to connect with industry leaders and peers, which can lead to new trading opportunities and collaborations. As we approach this event, traders should keep an eye on market volatility and sentiment leading up to February. Events like these often create a buzz that can impact trading volumes and price movements in various assets, particularly in forex and crypto markets. It’s also worth noting that the insights shared during such expos can lead to shifts in trading strategies among participants, potentially affecting market dynamics in the weeks following the event. So, watch for any emerging trends or strategies that could arise from the expo discussions, as they might provide actionable intelligence for your trading approach. 📮 Takeaway Mark your calendars for February 10-12, 2026, and watch for market shifts and strategies emerging from the iFX EXPO Dubai.

FUNDAMENTAL OVERVIEWUSD:The US Dollar remains on the backfoot as the bearish momentum set by the USD/JPY intervention risks kept weighing on the greenback. US Treasury Secretary Bessent yesterday said that they are not intervening in dollar-yen now and that gave the dollar a bit of a boost although it didn’t last long.The Fed kept interest rates unchanged as expected and upgraded a bit its current economic outlook in the statement to reflect the recent economic data. There was no surprise other than Fed’s Waller voting for a cut. That might have been just his last attempt to secure the nomination for the Fed chair job. Time will tell. Fed Chair Powell didn’t offer much in terms of forward guidance and just stuck to the script by reiterating the neutral stance and data-dependency. Today, we get the latest US Jobless Claims figures which could give the dollar some support if they come out strong. Otherwise, the greenback might remain on the backfoot until further notice. GBP:On the GBP side, the latest UK Flash PMIs came out much stronger than expected and triggered a slightly hawkish repricing which gave the pound a boost. The employment and inflation reports, on the other hand, came out basically in line with expectations. As a reminder, the BoE cut by 25 bps at the last meeting and sounded more optimistic on the inflation outlook after a very soft inflation report in November. The market is pricing 34 bps of easing by year-end with the next cut seen in June at the earliest. GBPUSD TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that GBPUSD rose into a new cycle high this week as the US Dollar continued to weaken across the board. This is where we can expect the buyers to step in with a defined risk below the recent lows to keep pushing into new highs. The sellers, on the other hand, will want to see the price falling back below the previous cycle high at 1.3789 to position for a correction into the major trendline around the 1.35 handle.GBPUSD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see that we had a steep minor upward trendline defining the bullish momentum. The price broke below the trendline which generally precedes a pullback or some consolidation. The most recent swing low around the 1.3750 level should act as support. If the price gets there, we can expect the buyers to step in with a defined risk below the swing level to position for a rally into new highs. The sellers, on the other hand, will look for a break lower to pile in for a drop into the major trendline around the 1.35 handle.GBPUSD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we can see that we have a minor counter-trendline that act as support. The buyers will likely continue to lean on the minor trendline to keep pushing into new highs, while the sellers will look for a break lower to position for a pullback into the 1.3750 level targeting a break below it. The red lines define the average daily range for today.UPCOMING CATALYSTSTodaywe get the latest US Jobless Claims figures. Tomorrow, we conclude the week with the US PPI report. This article was written by Giuseppe Dellamotta at investinglive.com. 🔗 Source 💡 DMK Insight The US Dollar’s recent struggles highlight a critical moment for forex traders. With bearish momentum driven by USD/JPY intervention risks, traders need to stay alert. Treasury Secretary Bessent’s comments about not intervening in the dollar-yen pair provided a temporary lift, but the underlying weakness remains. This could signal further downside for the dollar, especially if the market perceives ongoing intervention risks. Keep an eye on the USD/JPY pair; if it breaks below key support levels, it could trigger a wave of selling across dollar-denominated assets. Additionally, watch for any shifts in sentiment from major institutions, as their positioning could amplify volatility. The real story here is how the dollar’s weakness might ripple through correlated markets, particularly commodities and emerging market currencies, which often react to dollar fluctuations. For now, monitor the USD/JPY closely, especially around psychological levels. A break below recent lows could open the door for more aggressive bearish plays against the dollar. 📮 Takeaway Watch the USD/JPY pair closely; a break below key support could signal further dollar weakness and impact correlated markets.

As intervention risks continue to stay heightened, there is plenty of uncertainty with regards to the USD/JPY outlook in the short-term. What is the trigger point for the ministry of finance (MOF) to take action? At what levels will they be comfortable with USD/JPY trading in the aftermath? Without any real change to the fundamental drivers, what happens when the pair rebounds higher after a few weeks/months?The Takaichi trade is still the main risk for the Japanese yen at the moment and Tokyo officials certainly know that. The good news that they can bank on right now is that the US dollar is also at weak extremes and looking very vulnerable. And also the fact since the Bank of Japan (BOJ) meeting, the bond market has calmed down considerably.So far, they have only gone as far as performing a couple of ‘rate checks’ since last Friday. That is keeping the yen currency from crumbling, with it having fallen alongside the dollar before that. But even so, all we’re seeing is a push down in USD/JPY from 159.00 levels to 153.00 levels currently. The pair is still up 4% from the gap higher in early October, which marked the commencement of the Takaichi trade.So, what happens now to USD/JPY?BofA argues that there is a balance to be struck and that might fit with a USD/JPY range of around 145 to 155 in the near-term.”According to the Tankan survey, large manufacturers assume average USD/JPY rate for FY25 to be 146.50.. USD/JPY’s drop below 145 appears undesirable in the near-term. 145-155 range may strike a fine balance between stability in the equity market and the bond market. However, a volatile selloff in USD/JPY below 150 could lead to a sharp selloff in equities, which increases the bar for intervention with USD/JPY below 155.”Looking further out, the firm notes that perhaps Tokyo officials might want the currency pair to keep lower than that. However, BofA says that it will be tough to sustain such a move with just intervention alone:”In the medium-term, the government may be comfortable with a lower USD/JPY rate but not lower than manufactures’ “breakeven” USD/JPY rate, which was 127 as of late 2024/early 2025. 135-145 may be a desired range though this would require something more than unilateral FX intervention.”As a reminder, Japan last intervened to prop up the yen currency back in July 2024. That helped to push USD/JPY down from above 160 to test 140 in about two months. But right after that, the pair managed a rebound all the way back up to near 159 by the time we got to January 2025.That serves as a good anecdote that actual intervention doesn’t always mean lasting impact, especially if not accompanied by a shift in fundamental drivers. This article was written by Justin Low at investinglive.com. 🔗 Source