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What to pay attention to on January 13? Breakdown of fundamental events for beginners

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Review of macroeconomic reports:

Only one macroeconomic report is scheduled for Tuesday — the US consumer price index for December. And this report is the most important one this week. We remind novice traders that the Fed makes monetary policy decisions based on three indicators: inflation, unemployment, and the labor market. We have already seen the last two reports last week and, in our view, they were not encouraging. Only inflation remains to be seen. A new slowdown in it (in November, a drop from 3% to 2.7% was recorded) will bring the Federal Reserve closer to a new cut in the key rate. In that case, the dollar may resume its decline. Otherwise, the US currency may receive some market support, but nothing will change fundamentally.

Analysis of fundamental events:

Several fundamental events are scheduled for Monday — speeches by Thomas Barkin and Alberto Musalem (Fed). Several members of the Fed's monetary committee have already given comments this year; those comments were practically meaningless in the context of Powell's December position and the Fed's monetary policy as a whole. Three indicators will influence the Fed's rate decisions in 2026: the labor market, unemployment, and inflation. Labor market reports last week showed no improvements. Although the unemployment rate has decreased, it remains at the highest level in the last 3 years. The inflation report will be released today, after which one can make assumptions about a possible Fed decision at the January meeting.

The market's focus is now on Donald Trump, who may soon give an order to carry out a military operation in Mexico and Greenland.

General conclusions:

During the second trading day of the week, both currency pairs may continue to rise, but everything will depend on news from the White House and the inflation report. The euro can be traded today in the range 1.1655–1.1666, and the pound sterling — in the range 1.3437–1.3446. Buy signals were already formed yesterday; new ones may be formed today.

Main rules of the trading system:

1. Signal strength is judged by the time required to form the signal (rebound or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened on false signals near a level, then all subsequent signals from that level should be ignored.
3. In a flat, any pair can generate a mass of false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened during the period between the start of the European session and the middle of the American session; after that, all trades must be closed manually.
5. On the hourly timeframe, MACD-based signals should ideally be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are located too close to each other (5–20 pips), they should be considered a support or resistance area.
7. After a move of 15–20 pips in the correct direction, set the Stop Loss to breakeven.

What is shown on the charts:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit can be placed near them.

Red lines — channels or trendlines that reflect the current tendency and show which direction is preferable to trade now.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can strongly affect a currency pair's movement. Therefore, during their release, trading should be done with maximum caution, or positions should be closed, to avoid a sharp price reversal against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.

The material has been provided by InstaForex Company - www.instaforex.com.

How to Trade the GBP/USD Currency Pair on January 13? Simple Tips and Trade Analysis for Beginners

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Monday trade review:

1H chart of the GBP/USD pair

The GBP/USD pair also traded higher on Monday, driven by the initiation of a criminal investigation against Jerome Powell. Powell himself has already commented on the situation, calling it a result of constant White House pressure on the Fed. The market reacted with a sell-off of the US currency, which is another factor in the US dollar's future decline, a decline that many have accumulated over the past year. The GBP/USD pair has been trading more sideways than up or down in recent weeks, but overall, the uptrend remains. In our view, Donald Trump's policy will continue to have a destructive effect on the US currency. Even Trump's geopolitical ambitions will not increase demand for the US currency as a "safe asset." Recall that Trump staged a coup in Venezuela at the beginning of the year, and now intends to annex Greenland and "restore order" in Cuba and Mexico. There was no macroeconomic background on Monday.

5M chart of the GBP/USD pair

On the 5-minute TF on Monday, a buy trading signal was formed, which remains relevant on Tuesday. The price broke through the 1.3437–1.3446 area during the European trading session, allowing novice traders to open long positions. The target of the move is the area 1.3529–1.3543. However, we would like to remind you that market volatility remains fairly low, except on days when extraordinary news arrives. Like yesterday.

How to trade on Tuesday:

On the hourly TF, the GBP/USD pair settled below the trendline, but there is no clear downtrend at the moment. Rather, another flat. There are no global grounds for medium-term dollar strength, so we expect movement only to the north. Overall, we also expect the resumption of the 2025 global uptrend, which could bring the pair to the 1.4000 mark within the next couple of months.

On Tuesday, novice traders can consider new short positions targeting the area 1.3319–1.3331 if the price settles below the area 1.3437–1.3446. A close above the area 1.3437–1.3446 on Monday keeps long positions relevant with a target of 1.3529–1.3543.

On the 5-minute TF, you can now trade at the levels 1.3043, 1.3096–1.3107, 1.3203–1.3212, 1.3259–1.3267, 1.3319–1.3331, 1.3437–1.3446, 1.3529–1.3543, 1.3574–1.3590, 1.3643–1.3652, 1.3682, 1.3763. No important data or events are scheduled in the UK for Tuesday, but the US will publish the December inflation report, which could have a strong impact on the January Fed meeting and the decision on the key rate.

Main rules of the trading system:

1. Signal strength is judged by the time required to form the signal (rebound or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened on false signals near a level, then all subsequent signals from that level should be ignored.
3. In a flat, any pair can generate many false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened between the start of the European session and the middle of the American session; after that, all trades must be closed manually.
5. On the hourly timeframe, MACD-based signals should be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are located too close to each other (5–20 pips), they should be considered a support or resistance area.
7. After the price moves 20 pips in the correct direction, set the stop loss to breakeven.

What is shown on the charts:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit can be placed near them.

Red lines — channels or trendlines that reflect the current tendency and show which direction is preferable to trade now.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can strongly affect a currency pair's movement. Therefore, during their release, trading should be done with maximum caution, or positions should be closed, to avoid a sharp price reversal against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.

The material has been provided by InstaForex Company - www.instaforex.com.

How to Trade the EUR/USD Currency Pair on January 13? Simple Tips and Trade Analysis for Beginners

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Monday trade review:

1H chart of the EUR/USD pair

The EUR/USD currency pair remains in a downtrend, although it showed quite a decent rise on Monday. The decline of the US currency was triggered by the initiation of a criminal case against Fed Chair Jerome Powell for overspending related to the reconstruction of Fed buildings four years ago. In reality, no criminal case has been opened, and charges have not been brought. However, the very fact that the presidential administration is suing the Fed chair could not help but provoke a market reaction. Traders understand that the investigation was initiated for only one reason — Powell's refusal to cut the key rate as demanded by the White House, which has no right to influence monetary policy. Nevertheless, Trump's tasks are not impossible. Powell leaves the Fed chair position in four months, but the US president still exerts pressure on him, likely as a lesson for the new Fed chair and other FOMC officials. There were no other events or news during the day.

5M chart of the EUR/USD pair

On the 5-minute TF on Monday, one trading signal was formed. At the beginning of the European trading session, the area 1.1655–1.1666 was broken, which allowed novice traders to open long positions. As we can see, the rise did not last long, but the price ended the day above that area. A bounce and a new rise are possible. At the same time, movement to the north may be constrained by the descending trendline on the hourly TF.

How to trade on Tuesday:

On the hourly timeframe, the formation of a downtrend continues, as evidenced by the trendline. It was not possible to overcome the area 1.1800–1.1830, which is the upper boundary of the flat on the daily TF, so the technical decline is logical and may continue down to the 1.1400 level. The overall fundamental and macroeconomic background remains very weak for the US dollar, but the flat on the daily TF plays a priority role, and traders practically ignore the macroeconomic background.

On Tuesday, novice traders can again trade from the area 1.1655–1.1666. A bounce off this area will allow opening long positions with a target of 1.1745–1.1754. A close below this area will make shorts relevant with a target of 1.1584–1.1591.

On the 5-minute TF, the levels to consider are 1.1354–1.1363, 1.1413, 1.1455–1.1474, 1.1527–1.1531, 1.1550, 1.1584–1.1591, 1.1655–1.1666, 1.1745–1.1754, 1.1808, 1.1851, 1.1908, 1.1970–1.1988. Today, no important events or reports are scheduled in the EU, but an important inflation report will be published in the US, which may significantly increase the likelihood of an earlier resumption of Fed easing if the report shows further slowdown.

Main rules of the trading system:

1. Signal strength is judged by the time required to form the signal (rebound or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened on false signals near a level, then all subsequent signals from that level should be ignored.
3. In a flat, any pair can generate many false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened during the period between the start of the European session and the middle of the American session; after that, all trades must be closed manually.
5. On the hourly timeframe, MACD-based signals should ideally be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are located too close to each other (5–20 pips), they should be considered as a support or resistance area.
7. After the price moves 15 pips in the correct direction, place a stop loss at breakeven.

What is shown on the charts:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit can be placed near them.

Red lines — channels or trendlines that reflect the current tendency and show which direction is preferable to trade now.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can strongly affect a currency pair's movement. Therefore, during their release, trading should be done with maximum caution, or positions should be closed, to avoid a sharp price reversal against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.

The material has been provided by InstaForex Company - www.instaforex.com.

Although sellers remains quite dominant, the appearance of a Bullish Divergence gives an opportunity for Natural Gas to strengthen

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[Natural Gas]

Although EMAs have not yet formed a Golden Cross, but the appearance of a Bullish Divergence on RSI(14) indicates there is a potential for strength in #NG in the near term.

Key Levels

1. Resistance. 2 : 3.565

2. Resistance. 1 : 3.459

3. Pivot : 3.325

4. Support. 1 : 3.219

5. Support. 2 : 3.085

Tactical Scenario

Positive Reaction Zone: If the price holds above 3.325, #NG may rise toward 3.459.

Momentum Extension Bias: If 3.459 is broken, Natural Gas could test 3.565.

Invalidation Level / Bias Revision

The upside bias weakens if Natural Gas falls and breaks below 3.085.

Technical Summary

EMA(50) : 3.317

EMA(200): 3.396

RSI(14) : 51.96 + Bullish Divergent

Economic News Release Agenda:

Tonight from the United States the following economic data will be released:

US - NFIB Small Business Index - 18:00 WIB

US - ADP Weekly Employment Change - Tentative

US - Core CPI m/m - 20:30 WIB

US - CPI m/m - 20:30 WIB

US - CPI y/y - 20:30 WIB

US - New Home Sales - 22:00 WIB

US - RCM/TIPP Economic Optimism - Tentative

US - 30-y Bond Auction - 01:01 WIB

US - Federal Budget Balance - 02:00 WIB

US - API Weekly Statistical Bulletin - 04:30 WIB

The material has been provided by InstaForex Company - www.instaforex.com.

Crude Oil has the potential to continue its strengthening bias today, despite the possibility of a limited correction.

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[Crude Oil]

Although there is potential for a correction indicated by the appearance of a Bearish Divergence on RSI(14), but with the Golden Cross condition between the two EMAs, suggests that #CL has the opportunity to strengthen again.

Key Levels

1. Resistance. 2 : 60.85

2. Resistance. 1 : 60.34

3. Pivot : 59.40

4. Support. 1 : 58.89

5. Support. 2 : 57.95

Tactical Scenario

Positive Reaction Zone: If the price holds above 59.40, there is a possibility #CL will rise toward 60.34.

Momentum Extension Bias: If 60.34 is broken and closes above, Crude Oil could continue strengthening to 60.85.

Invalidation Level / Bias Revision

The upside bias weakens if Crude Oil falls and breaks below 57.95.

Technical Summary

EMA(50) : 59.28

EMA(200): 58.36

RSI(14) : 58.78 + Bearish Divergent

Economic News Release Agenda:

Tonight from the United States the following economic data will be released:

US - NFIB Small Business Index - 18:00 WIB

US - ADP Weekly Employment Change - Tentative

US - Core CPI m/m - 20:30 WIB

US - CPI m/m - 20:30 WIB

US - CPI y/y - 20:30 WIB

US - New Home Sales - 22:00 WIB

US - RCM/TIPP Economic Optimism - Tentative

US - 30-y Bond Auction - 01:01 WIB

US - Federal Budget Balance - 02:00 WIB

US - API Weekly Statistical Bulletin - 04:30 WIB

The material has been provided by InstaForex Company - www.instaforex.com.

Overview of the GBP/USD pair. January 13. The public execution of Powell

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The GBP/USD currency pair also traded higher on Monday, and the reason could only have been one — the criminal case against Jerome Powell, which, in fact, has not even been opened yet. Nevertheless, agree that it is not an ordinary event when the head of the world's largest central bank is summoned to court. So far, it is only about giving voluntary testimony to representatives of the Department of Justice, following which a decision will be made whether Powell violated the law and his oath. Therefore, nothing terrible has yet happened to Jerome Powell personally, and there is no doubt that he will serve out his term as Fed chair to the end.

However, traders clearly did not like the continuation of this story. Many traders, when the fountain of fierce criticism from the White House calmed down somewhat this autumn (the Fed nevertheless resumed monetary easing), believed the story was over. Indeed, what was the point of dismissing Powell in court if he would resign in four months anyway? But, as we have already said, this is a public execution. Now the situation in America is as follows. You may have two opinions: either coinciding with the opinion of the leader and ruler of the nation, or incorrect. Fine if you are a farmer from Texas and share your opinion with your farmer friends after a hard day's work. But if you hold an official position, you cannot think differently from Donald Trump. In general, it is time to create a "thought police" in America and prosecute for "thoughtcrime."

Recall that in the fall, Trump fired the head of the Bureau of Labor Statistics because he did not like the official labor market data. Since then, the labor market data have not improved, but what better punishment for disobedience to the king? Probably Trump exerted exactly the same pressure on the Bureau of Labor Statistics as on the Fed, but received a refusal to "slightly adjust the official statistics." Trump needs numbers and money. The money problem is solved simply — tariffs, cuts to social and medical payments, and raising prices for government services. Numbers are a bit harder, since many of Trump's decisions and decrees so far have only worsened economic conditions.

Trump must have ironclad grounds to declare from a podium in Colorado that the economy under his leadership is growing to unprecedented levels. So he can then call "fools" all those who vote for the Democrats. Thus, in our view, summoning Powell to court, the possible dismissal and the accusations of overspending and perjury are needed for only one thing — so that all other public servants of all ranks, who for some reason do not want to follow instructions from the White House, fully realize what awaits them. The situation is similar to Venezuela. The demonstrative military operation was spectacular and effective at the same time, but hardly too difficult for the US military. It was needed only so that threats from the White House would have some basis. While Trump scatters threats of military seizure in all directions, these are only words. But when, just a week ago, Trump arranged a military invasion of another state, his words gained greater weight. Now Cuba, Colombia, Mexico, Iran, and the European Union will have to take Trump's ultimatums and military threats more seriously.

Average volatility of the GBP/USD pair over the last 5 trading days is 73 pips. For the pound/dollar pair, this value is "medium." On Tuesday, January 13, therefore, we expect movement within a range bounded by levels 1.3395 and 1.3541. The higher linear regression channel has turned upward, indicating a trend recovery. The CCI indicator entered the oversold area 6 times over recent months and formed numerous "bullish" divergences, which have consistently warned traders of a continuation of the upward trend.

Nearest support levels:

S1 – 1.3428

S2 – 1.3306

S3 – 1.3184

Nearest resistance levels:

R1 – 1.3550

R2 – 1.3672

R3 – 1.3794

Trading recommendations:

The GBP/USD pair is trying to resume the 2025 uptrend, and its long-term prospects have not changed. Donald Trump's policies will continue to put pressure on the US economy, so we do not expect the US currency to appreciate. Thus, long positions with targets at 1.3550 and 1.3672 remain relevant in the near term as long as the price remains above the moving average. A price below the moving average line allows considering small shorts with a target of 1.3306 on technical grounds. From time to time, the US currency shows corrections (on a global scale), but for a trend to strengthen, it needs global positive factors.

Explanations of the illustrations:

• Linear regression channels help determine the current trend. If both are directed the same way, the trend is strong.
• The moving average line (settings 20,0, smoothed) indicates the short-term trend and the direction in which trading should proceed.
• Murray levels are target levels for moves and corrections.
• Volatility levels (red lines) indicate the likely price channel in which the pair will trade over the next 24 hours based on current volatility.
• CCI indicator — its entry into oversold territory (below -250) or overbought territory (above +250) signals an approaching trend reversal.

The material has been provided by InstaForex Company - www.instaforex.com.

Overview of the EUR/USD pair. January 13. Finita la comedia

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The EUR/USD currency pair showed significant volatility and good growth on Monday. Recall that we warned of a high probability of a "boring Monday," since no scheduled macroeconomic releases or fundamental events were on the calendar. However, an unscheduled speech by Jerome Powell took place overnight, against whom a criminal case had been opened a short time earlier...

So, the story about overspending on the reconstruction of the Fed buildings, which took place 4 years ago, has nonetheless developed. Donald Trump, for a long time, threatened to sue Powell, whom he himself appointed 8 years ago as chairman of the US central bank, and has finally moved from words to action. Although if you look at the issue a bit more seriously, the picture is somewhat different.

Last summer, Powell faced accusations of giving false testimony before the US Congress (perjury). According to Republicans, Powell did not mention expensive marble or a VIP dining room during the discussion of the Fed's reconstruction budget before Congress. The initial estimate rose from $600 million to $2.5 billion, but Congress approved it. Now, when Trump is doing everything he can to remove Powell (although there is little point in this anymore), senators and congressmen suddenly decided that Powell spent too much money. Let me remind you that this is not about Powell repairing his own residence at public expense. It concerns Fed buildings, and what personal interest could Powell have in spending as much money as possible on something that does not belong to him? What exactly is his guilt? There are surely official documents that itemize all expenditures with the materials used and the work performed. Congress surely saw that estimate. And if it did not see it, the question arises — why? It is unlikely that Powell hid it.

In general, the theater of American absurdity continues. The most interesting thing is that, in fact, a criminal case has not yet been opened. Powell was only summoned to testify before a "grand jury." This is not an official court hearing; it has the character of voluntary witness testimony. Simply put, Powell must provide documents showing how the money was spent. Then the Department of Justice will decide whether there was overspending of state funds and whether Powell made false statements to Congress 4 years ago.

In short, no sanctions will be applied to Powell in the near future, and he will leave his post as Fed chair before a court issues a verdict (if the case even goes to trial). Essentially, there is no point for Trump to keep fighting Powell, since Powell's term expires in May. But this is, so to speak, a show punishment. So that other members of the FOMC will be more compliant and obedient when the US president demands a rate cut. The dollar clearly did not like that development...

The average volatility of the EUR/USD pair over the past 5 trading days as of January 13 is 50 pips, which is characterized as "low." We expect the pair to move between 1.1624 and 1.1724 on Tuesday. The higher linear regression channel is upward, but in fact, the daily TF is still flat. The CCI indicator recently formed another "bullish" divergence, pointing to the resumption of the upward trend. However, the key point remains the flat on the daily TF.

Nearest support levels:

S1 – 1.1658

S2 – 1.1597

S3 – 1.1536

Nearest resistance levels:

R1 – 1.1719

R2 – 1.1780

R3 – 1.1841

Trading recommendations:

The EUR/USD pair remains below the moving average, but on all higher TFs the uptrend is preserved, and on the daily TF a flat continues for the sixth month in a row. The global fundamental background still matters greatly to the market, and it remains negative for the dollar. Over the past six months, the dollar has occasionally shown weak gains, but exclusively within a side channel. It has no fundamental basis for long-term strengthening. With the price below the moving average, small shorts can be considered, with targets at 1.1624 and 1.1597 on purely technical grounds. Above the moving average line, long positions remain relevant, with a target of 1.1830 (the upper line of the flat on the daily TF), which has already been reached and not overcome.

Explanations of the illustrations:

• Linear regression channels help determine the current trend. If both are directed the same way, the trend is strong.
• The moving average line (settings 20,0, smoothed) indicates the short-term trend and the direction in which trading should proceed.
• Murray levels are target levels for moves and corrections.
• Volatility levels (red lines) indicate the likely price channel in which the pair will trade over the next 24 hours based on current volatility.
• CCI indicator — its entry into oversold territory (below -250) or overbought territory (above +250) signals an approaching trend reversal.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading Recommendations and Trade Review for GBP/USD on January 13. The pound continues to push in a limited range

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Analysis GBP/USD 5M

The GBP/USD currency pair also rose on Monday, but over the past three weeks, it has traded sideways more than up or down. At the moment, the British currency has recovered to the Ichimoku indicator lines, so a rebound from them could trigger a new decline, while a break through them would mean a continuation of the rise. At the start of the new week, the market was actively reacting to a new round of conflict between Powell and Trump, which could end very badly for the Fed chairman. In any case, Jerome Powell will leave his post in May of this year, and Donald Trump will not stop his attempts to establish control over the US central bank. Thus, this story is far from over.

However, whenever Powell leaves, Trump will still face a much more difficult task. Recall that Powell does not decide alone what the key rate should be. The FOMC decides by a simple vote. Therefore, the US president needs six "loyal vassals" on the committee to influence monetary policy. We believe the US president will continue working on this into 2026. As for the pair's movements in the second half of January, an important US inflation report will be released today, and after that, everything will depend more on technical factors.

On the 5-minute TF yesterday, there was only one decent buy signal. During the European trading session, the price broke through the Senkou Span B line, allowing the opening of longs targeting the critical line. That line was reached within a few hours. A close above the Kijun-sen will allow opening new longs.

COT report

COT reports on the British pound show that, in recent years, the mood of commercial traders has fluctuated. The red and blue lines, which display net positions of commercial and non-commercial traders, constantly cross and, in most cases, are near the zero mark. At the moment, the lines are moving apart, but non-commercial traders are currently dominating the... sales. Speculators are selling the pound more and more often, but, as we have already said, it does not matter how low the demand for the British currency is. Demand for the US dollar is often even lower.

The dollar continues to decline due to Donald Trump's policies, as shown clearly in the weekly TF (illustration above). The trade war will continue in one form or another for a long time, and the Fed will, in any case, cut rates within the next 12 months. Demand for the dollar will fall one way or another. According to the latest COT report (as of January 6) on the British pound, the "Non-commercial" group opened 7,000 BUY contracts and 4,300 SELL contracts. Thus, the net position of non-commercial traders increased over the week by 2,700 contracts.

In 2025, the pound rose quite strongly, but it should be understood that the reason is one — Trump's policies. Once this reason is neutralized, the dollar may begin to rise, but no one knows when.

Analysis GBP/USD 1H

On the hourly timeframe, the GBP/USD pair continues to form an upward trend despite the breach of the trendline. We believe the pound's medium-term rise will continue regardless of the local macroeconomic and fundamental backdrop. At the moment, the euro, which has been falling for three weeks, may pull the pound down.

For January 13, we highlight the following important levels: 1.3042–1.3050, 1.3096–1.3115, 1.3201–1.3212, 1.3307, 1.3369–1.3377, 1.3437, 1.3533–1.3548, 1.3615, 1.3681, 1.3763. The Senkou Span B (1.3483) and Kijun-sen (1.3465) lines can also be sources of signals. It is recommended to move the Stop Loss to breakeven when the price moves 20 pips in the favorable direction. The Ichimoku indicator lines may shift during the day, which should be taken into account when determining trading signals.

On Tuesday, there are again no important reports or events scheduled in the UK, while an important inflation report will be released in the US. This report will largely determine the fate, if not of the January meeting, then of the March one. Thus, for the second day in a row, the market may see decent volatility.

Trading recommendations:

Today, traders may consider selling if the price bounces off the area of the Senkou Span B and Kijun-sen lines. Long positions will become relevant if the price consolidates above the Senkou Span B line with a target in the 1.3533–1.3548 area.

Explanations of the illustrations:

• Price support and resistance levels (resistance/support) — thick red lines near which movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines — Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour. They are strong lines.
• Extremum levels — thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow lines — trend lines, trend channels, and any other technical patterns.
• Indicator 1 on the COT charts — the size of the net position of each trader category.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading Recommendations and Trade Review for EUR/USD on January 13. Euro close to breaking the trend

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Analysis EUR/USD 5M

The EUR/USD currency pair traded higher on Monday but remained below the trendline and the Senkou Span B line. Therefore, it is still too early to speak of a change of the local trend to bullish. On Monday, it became known that a criminal case had been opened against Jerome Powell on the same charges: exceeding the budget for repairs to Fed buildings and giving false testimony to Congress when that estimate was discussed. Thus, on Monday, the dollar plunged from the market open. However, during the day, its decline is not strong enough, so this factor may already be priced in. In that case, the downward trend will remain on the hourly TF, while the daily TF will definitely remain range-bound.

We continue to believe that the key factor for the euro (and perhaps for the entire FX market) remains the six-month flat in the 1.1400–1.1830 range. Last week, even the most important U.S. macro data on the labor market and unemployment failed to stir traders. The pair's volatility remains low except for rare exceptions, such as yesterday. But even such days are unable to pull the euro out of the sideways channel.

On the 5-minute TF, only one buy trading signal was formed. During the European session, the price settled above the critical line, but could not continue to rise. Below the support area, the range is also 1.1657–1.1666. Thus, today the upward movement may continue toward the Senkou Span B line. However, recall the trendline on the hourly TF. It may well stop the pair's rise and return it to a technical decline within the flat.

COT report

The latest COT report is dated January 6. The illustration above clearly shows that the net position of non-commercial traders was bullish for a long time; bears barely moved into a zone of superiority at the end of 2024, but very quickly lost it. Since Trump took office for a second time as U.S. president, only the dollar has been falling. We cannot say the dollar's decline will continue with 100% probability, but current global developments suggest that scenario. The red and blue lines are diverging, indicating strong bullish dominance.

We still do not see any fundamental factors that would strengthen the euro, while there remain sufficient factors that would weaken the U.S. currency. The global downward trend still persists, but what does it matter now where the price moved over the last 17 years? Over the past three years, only the euro has been rising, and that is also a trend.

The positions of the red and blue indicator lines continue to signal the preservation and strengthening of the bullish trend. During the last reporting week, the number of longs in the "Non-commercial" group increased by 3,500, while the number of shorts decreased by 1,800. Accordingly, the net position for the week grew by another 5,300 contracts.

Analysis EUR/USD 1H

On the hourly timeframe, the EUR/USD pair continues forming a downward trend. Several weeks ago, the upper line of the sideways channel 1.1400–1.1830 was tested twice, but the euro failed to break out of it. Thus, technically, the pair's decline is consistent. To count on euro appreciation and a new attempt to overcome the 1.1800–1.1830 area, one should wait at least for a breakout of the trendline.

For January 13, we highlight the following levels for trading: 1.1234, 1.1274, 1.1362, 1.1426, 1.1542, 1.1604–1.1615, 1.1657–1.1666, 1.1750–1.1760, 1.1846–1.1857, 1.1922, 1.1971–1.1988, as well as the Senkou Span B line (1.1734) and the Kijun?sen (1.1669). Ichimoku lines may shift during the day, which should be taken into account when determining trading signals. Do not forget to move the Stop Loss to breakeven if the price has moved 15 pips in the correct direction. This will protect against possible losses if the signal turns out to be false.

No interesting or important events are scheduled in the EU, while in the U.S., the final report from the triumvirate "Unemployment, labor market, inflation" will be released. This report may strongly influence future Fed decisions, so the market reaction to it may be strong.

Trading recommendations:

On Tuesday, traders may trade from the 1.1657–1.1666 area and the Kijun?sen line. A rebound from them will allow opening long positions with a target of 1.1734, while a close below will make shorts relevant with a target of 1.1604–1.1615.

Explanations of the illustrations:

• Price support and resistance levels (resistance/support) — thick red lines near which movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines — Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour. They are strong lines.
• Extremum levels — thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow lines — trend lines, trend channels, and any other technical patterns.
• Indicator 1 on the COT charts — the size of the net position of each trader category.

The material has been provided by InstaForex Company - www.instaforex.com.

The Great Confrontation. Part 3

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As of last autumn, only three people on the FOMC were prepared at nearly every meeting to vote in favor of policy easing: Christopher Waller, Michelle Bowman, and the Committee's new member, Stephen Miran. It is not hard to guess that all three were brought into the Committee by Donald Trump himself. However, three votes are insufficient for the Committee to cut the rate to the levels Trump wants, which, I remind you, are around 2%.

Jerome Powell is due to step down as Fed Chair in May 2026, but he will remain a member of the FOMC. Court proceedings may last several months or even years. One may assume there is little point left in trying to remove Powell through the courts, yet for Trump, there is a motive. He wants to remove from the Committee a person who openly disregarded his views and even ignored them while invoking his own authority and mandate. That is the purported purpose of this whole story about alleged embezzlement during the renovation of the Fed buildings.

It is currently known that Powell must appear before the court, not as part of a trial but to testify before a grand jury. The jurors will have to decide whether Powell is guilty and whether a full trial is required. Powell has already made initial comments. According to him, the legal proceedings were initiated solely to exert pressure on the Fed. "I have deep respect for the rule of law and the principle of accountability. No one, including me, can stand above the law. However, this unprecedented step by the presidential administration should be seen in the context of ongoing pressure aimed at influencing monetary policy," Powell said. "The threat of criminal charges is a consequence of the Fed setting interest rates based on what serves the public interest, not on the wishes of the president," the Fed chair stated.

Based on all of the above, as I wrote earlier, Trump has not abandoned the idea of bringing the Fed under his control, because his foreign and trade policies can severely damage the U.S. economy — and already have, in the form of a weakening labor market, rising unemployment, and higher inflation. If Trump wins this confrontation, confidence in the U.S. currency will collapse, as investors realize that Trump controls the dollar. And the U.S. president (as he has said many times) wants a cheap dollar. Consequently, in almost any scenario, the U.S. currency will tend to depreciate.

Wave pattern — EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward trend. Donald Trump's policy and the Fed's monetary policy remain significant factors in the long-term decline of the U.S. currency. Targets of the current trend segment may extend to the 25th figure. The current upward wave set may be complete, so the instrument faces a near-term decline. The trend segment that began on November 5 may still take on a five-wave appearance, but right now it is, in any case, a corrective wave.

Wave pattern — GBP/USD:

The wave picture of GBP/USD has changed. The downward corrective structure a-b-c-d-e in C of 4 appears to be complete, as does the whole wave 4. If this is indeed the case, I expect the main trend segment to resume its development with initial targets around the 38 and 40 figures. In the short term, I expected wave 3 or c to form, with targets near 1.3280 and 1.3360, which correspond to 76.4% and 61.8% on the Fibonacci scale. These targets have been reached. Wave 3 or C has presumably completed its formation, so in the near term, a downward wave or a set of waves may develop.

Main principles of my analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often bring changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is and can never be 100% certainty about the direction of movement. Do not forget protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

The material has been provided by InstaForex Company - www.instaforex.com.

The Great Confrontation. Part 2

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It should be understood that Jerome Powell refuses to lower the interest rate for a reason. First, he does not have the authority to do so alone. During FOMC votes, he has exactly the same vote as other governors. In other words, if the FOMC does not deem easing necessary, Powell's vote and words will mean nothing. Powell can vote for a rate cut at every meeting, but the other 11 Committee members can vote against it. That is the essence of governors' independence from the chair's opinion.

Second, the Federal Reserve pursues not only economic growth but also price stability and full employment in the United States. Simply put, the Fed, acting as the central bank, guarantees the fulfillment of financial obligations to every American. The Fed — like Robin Hood — is concerned that inflation does not hit the pockets of the poor, and that every American has the opportunity to earn enough for food, a car, and a home.

That is precisely why the Fed long refused to ease policy. Inflation in the US has exceeded the target for several years, the labor market has been "cooling" over the past three years, and unemployment is rising. Under such circumstances, a rate cut would lead not only to faster economic growth and lower unemployment, but also to a new rise in inflation. Unemployment affects about 4% of the population, while high inflation affects everyone. Therefore, the US central bank has had to balance between two fires over the past year. Trump obtained several rounds of easing, but in his view, that was not enough. The Fed continues to try to maintain the balance — to prevent further "cooling" of the labor market while keeping consumer prices under control.

Therefore, it cannot be said under any circumstances that Powell and his colleagues take a principled stance against the president. The Fed performs its functions, and the president intrudes into an area beyond his competence. At one point, Trump realized that threats led nowhere and launched a campaign against members of the FOMC. Recall that under very strange circumstances last summer, Adriana Kugler left her position. A little later, Trump tried to remove another governor, Lisa Cook, and did so via his social network, even without an official decree. However, the first court overturned Trump's decision and reinstated Cook in her post.

Wave pattern — EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward trend. Donald Trump's policy and the Fed's monetary policy remain significant factors in the long-term decline of the U.S. currency. Targets of the current trend segment may extend to the 25th figure. The current upward wave set may be complete, so the instrument faces a near-term decline. The trend segment that began on November 5 may still take on a five-wave appearance, but right now it is, in any case, a corrective wave.

Wave pattern — GBP/USD:

The wave picture of GBP/USD has changed. The downward corrective structure a-b-c-d-e in C of 4 appears to be complete, as does the whole wave 4. If this is indeed the case, I expect the main trend segment to resume its development with initial targets around the 38 and 40 figures. In the short term, I expected wave 3 or c to form, with targets near 1.3280 and 1.3360, which correspond to 76.4% and 61.8% on the Fibonacci scale. These targets have been reached. Wave 3 or C has presumably completed its formation, so in the near term, a downward wave or a set of waves may develop.

Main principles of my analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often bring changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is and can never be 100% certainty about the direction of movement. Do not forget protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

The material has been provided by InstaForex Company - www.instaforex.com.

The Great Confrontation. Part 1

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On Monday, like a thunderbolt out of a clear sky, news broke — a criminal case has been opened against Jerome Powell for embezzlement related to the renovation of Fed buildings. This story has been around for at least a year, but bureaucracy and paperwork have slowed the judicial process. Briefly, I will recall the backstory, which has two versions: the realistic and the invented.

Donald Trump, pursuing the goals of cutting government spending, reducing the budget deficit, and offsetting the negative trade balance, eventually concluded that too much money had been spent on refurbishing Federal Reserve buildings. In Trump's view, FOMC governors and central bank staff could do without marble halls, various costly installations, a VIP dining room, and other elements of luxury. It doesn't matter that the renovation was completed several years ago and, by and large, the money already spent cannot be recovered. However, Trump considered this an outrageous event that demanded criminal prosecution for embezzlement of budgetary funds.

Eight years ago, during Trump's first presidential term, Powell was chosen as Fed Chair with a single purpose — so that Trump could influence the Fed through his man. But with Powell, Trump miscalculated. The new FOMC chair refused to follow Trump's direct orders, and legally, he was not obliged to, since the Fed is not subordinate to Congress or the president. The Fed is an independent, apolitical organization whose principal aim is to manage the economy. When Trump realized his mistake, it was already too late. The Fed chair is elected for an eight-year term, and dismissal requires very substantial reasons and congressional approval. Eight years ago, Congress was not as fully Republican as it is now.

Trump began to criticize Powell, called him in to the White House, and publicly insulted him, but Powell did not even react to these attacks, fully understanding that he was acting within the law and the Fed's mandates. Eight years passed, and Powell is preparing to leave his post. When Trump became U.S. president for the second time, Powell had about 1.5 years left in his term. The old story acquired new colors. Trump criticized, threatened, and demanded rate cuts to achieve higher economic growth. But Powell stood his ground again, like a rock. After that, the story began about hypothetical embezzlement on the repair of Fed buildings, in which "only Powell" is blamed.

Wave pattern — EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward trend. Donald Trump's policy and the Fed's monetary policy remain significant factors in the long-term decline of the U.S. currency. Targets of the current trend segment may extend to the 25th figure. The current upward wave set may be complete, so the instrument faces a near-term decline. The trend segment that began on November 5 may still take on a five-wave appearance, but right now it is, in any case, a corrective wave.

Wave pattern — GBP/USD:

The wave picture of GBP/USD has changed. The downward corrective structure a-b-c-d-e in C of 4 appears to be complete, as does the whole wave 4. If this is indeed the case, I expect the main trend segment to resume its development with initial targets around the 38 and 40 figures. In the short term, I expected wave 3 or c to form, with targets near 1.3280 and 1.3360, which correspond to 76.4% and 61.8% on the Fibonacci scale. These targets have been reached. Wave 3 or C has presumably completed its formation, so in the near term, a downward wave or a set of waves may develop.

Main principles of my analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often bring changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is and can never be 100% certainty about the direction of movement. Do not forget protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/JPY. Yen and Politics: Japan Prepares for Early Parliamentary Elections

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The EUR/JPY pair is showing upward dynamics, offsetting losses of the previous three weeks. The rise is driven primarily by yen weakness amid the possibility of a political crisis in Japan, though the euro also contributes amid slowing inflation in the eurozone.

According to available information, Sanae Takaichi, leader of Japan's ruling Liberal Democratic Party (LDP), plans to dissolve the lower house of parliament and call early elections that could take place as early as next month. Preliminary reports indicate the prime minister may announce this decision next Friday, January 23.

Recall that the LDP currently does not hold an absolute majority in either chamber. The failed "experiment" of Takaichi's predecessor, Shigeru Ishiba, who sought to strengthen his position through early elections, left the LDP dependent on coalition partners (currently governing in coalition with the Japan Innovation Party). Ishiba expected that snap elections would consolidate his political position and grant greater freedom of action, but that proved to be a fatal mistake that led to his political collapse. As a result of the vote, the LDP lost its majority in the lower house (for the first time since returning to power in 2012). And when upper-house elections were held last July, the ruling coalition lost its majority there as well.

Takaichi is attempting to repeat that path but with a different, more favorable outcome for her. According to recent Nikkei polls, the prime minister's approval rating is at 60–70%, one of the highest figures in history. It appears the prime minister plans to "seize the moment" to restore LDP control over both chambers of the national parliament.

Despite Takaichi's political success (largely due to her hardline foreign-policy stance), many experts consider the decision to dissolve parliament overly risky. Domestic issues remain: weak economic conditions (Japan's GDP fell by 0.6% in Q3 last year), intraparty contradictions, yen depreciation, and inflation. Real wage growth is clearly lagging behind consumer-price growth — in real terms, wages continue to show a downward trend. Price growth has exceeded the Bank of Japan's target for 44 consecutive months.

Rising tensions with China are also unpopular with many, given potential consequences for tourism and political fallout — especially after the prime minister's high-profile statement that possible Chinese military action against Taiwan would be considered "a situation threatening the existence of the country," a classification that gives Tokyo legal grounds to invoke the right to self-defense.

All this suggests non-negligible risks that Takaichi could repeat Ishiba's fate: a bold initiative that ultimately backfires, costing the party its parliamentary majority (and possibly the premiership).

The yen reacted negatively to the news of a potential dissolution. In times of political turbulence, the Bank of Japan is unlikely to raise interest rates, despite Kazuo Ueda's hawkish comments in late December indicating the central bank would continue to raise the policy rate. Yen weakness allows EUR/JPY buyers to push higher and renew local price highs.

The cross is rising not only because of yen weakness. The euro also shows resilience despite a slowdown in headline CPI. Core inflation remains relatively high (especially in services at 3.4%), meaning price pressure in the eurozone has not disappeared. Services and durable goods are the main contributors to price growth, reflecting wage and production pressures on the economy. The recent drop in energy prices is temporary and does not eliminate the structural inflation that persists in major regional economies, including Germany and France. All this suggests the European Central Bank is likely to remain on hold in the foreseeable future, at least in the first half of the year.

The current fundamental backdrop supports further upward moves in EUR/JPY toward resistance at 185.00. Technicals also favor the northbound scenario: on all higher timeframes (H4 and above), the pair is either at the upper band or between the middle and upper lines of the Bollinger Bands indicator. In addition, on the D1 and W1 timeframes, the Ichimoku indicator has produced one of its strongest bullish signals — the "Parade of Lines." The nearest (and primary) target for the upward move is 185.00, which corresponds to the upper Bollinger Band on the daily timeframe.

The material has been provided by InstaForex Company - www.instaforex.com.

Euro Attempts to Resume Growth Amid Negative News from the US

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The Sentix investor confidence indicator rose by 4.4 points in January to -1.8, the highest level since July 2025. The index's increase is primarily due to a rise in expectations, which have become much more positive; the assessment of the current situation remains weak but also shows an upward trend.

Overall, investors have begun to view the eurozone's economic prospects more positively, which provides an additional supporting factor for the euro.

On the whole, the eurozone economy looks more convincing than was forecast six months ago. GDP growth exceeded forecasts and was practically unaffected by the introduction of new U.S. import tariffs; the composite PMI remained in expansion throughout last year, and the average value of the index for Q4 was 52.3 points, a high since 2023.

The last European Central Bank meeting of the previous year also added positivity: staff forecasts were revised upward across the entire projection horizon, and the 2026 inflation forecast was revised up, which has all but ruled out another possible ECB rate cut. Clearly, this dynamic could not fail to support the euro.

Inflation fell to 2.0% year-on-year in December, reaching the ECB's target. Core inflation decreased to 2.3%, and since energy prices have recently declined, the inflation forecast for Q1 was revised down to 1.6% year-on-year, which is noticeably below the ECB's projection and increases the likelihood of a rate cut. At the moment, this is the main factor slowing the euro's growth, since the dollar cannot yet provide convincing evidence in favor of its own appreciation.

ECB member De Guindos, commenting on the inflation data, noted that the target has been reached, but uncertainty remains very high. Revised inflation data will be published on January 20, and the January PMIs on January 21; until then, no significant eurozone data is expected to influence euro forecasts.

The net long position on the euro increased by $0.7 billion during the reporting week and reached $23.8 billion; the speculative bias toward the euro is at its highest level since mid-2023, which is somewhat surprising given the unevenness of economic growth in the eurozone.

A week earlier, we expected that EUR/USD was close to completing its correction and resuming growth toward 1.1919; the euro fell slightly lower, but there are still no grounds to fear a reversal to the downside. Eurozone inflation in December was slightly below forecasts, which could have been a reason for euro selling due to fears of another ECB rate cut, but officials' comments calmed markets, and for the short term, that threat is absent. We expect growth to resume; the probability of a fall to the next support at 1.1520–1.1540 is low.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD. Smart Money. Trump Solved the Bulls' Indecision Problem

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The EUR/USD pair had been falling for eleven consecutive days. Within this decline, the bullish imbalance 9 was worked out with room to spare. This pattern has not been invalidated so far, and reactions from areas of interest can take different forms. Therefore, I continue to believe that the bullish trend remains intact. In my view, the bulls could have launched a new offensive as early as last week, when most U.S. economic data once again brought nothing but disappointment. However, the bears continued to push their position with notable persistence. The situation was resolved by Donald Trump overnight on Monday. A criminal investigation was launched against Jerome Powell, and traders clearly understand whom they should thank for this. Powell himself stated that having an independent opinion in America is becoming dangerous, and that his persecution has only one reason — his unwillingness to cut interest rates to the levels demanded by the U.S. president.

The dollar immediately began to decline, and I continue to wait for a bullish reaction from imbalance 9 until the invalidation of this pattern forces a conclusion that the bullish impulse has been canceled. Invalidation would occur below the 1.1616 level. This would not turn the trend bearish, but for some time the bears could seize the initiative.

The chart picture continues to signal bullish dominance. The bullish trend remains in place, but traders currently need new signals. Such a signal can be formed only within imbalance 9, but so far it has not appeared. If bearish patterns emerge or bullish ones are invalidated, the trading strategy will need to be adjusted. At the moment, however, there are no grounds for doing so.

The news background on Monday was essentially absent, but traders needed nothing more than the criminal prosecution of Powell and the explanations he provided shortly afterward to make decisions. In my view, this was a very predictable continuation of the story, and only one conclusion can be drawn from it — Trump seeks to control everything and everyone in whom or in which he is interested. As a result, the Federal Reserve has every chance of losing its independence, and the dollar has an excellent opportunity to fall well beyond the 1.20 level against the euro.

The bulls have had plenty of reasons for a new offensive for the past 4–5 months, and all of them remain relevant. These include the dovish (in any case) outlook for FOMC monetary policy, Donald Trump's overall policy (which has not changed recently), the U.S.–China confrontation (where only a temporary truce has been reached), protests by the American public against Trump under the "No kings" banner, weakness in the labor market, bleak prospects for the U.S. economy (recession), and the government shutdown (which lasted a month and a half but was clearly not fully priced in by traders). Now this list also includes U.S. military aggression toward certain countries and the criminal prosecution of Powell. Thus, further growth of the pair, in my view, will be entirely logical.

I still do not believe in a bearish trend. The news background remains extremely difficult to interpret in favor of the dollar, and therefore I do not attempt to do so. The blue line shows the price level below which the bullish trend could be considered finished. Bears would need to push the price down about 300 points to reach it, and I consider this task impossible under the current news background and circumstances. The nearest upward target for the European currency remains the bearish imbalance zone of 1.1976–1.2092 on the weekly chart, which was formed back in June 2021.

News Calendar for the U.S. and the Eurozone:

• United States – Consumer Price Index (13:30 UTC)
• United States – New Home Sales (13:30 UTC)

On January 13, the economic events calendar contains two noteworthy entries. The impact of the news background on market sentiment on Tuesday will be felt in the second half of the day.

EUR/USD Forecast and Trader Advice:

In my view, the pair may be in the final stage of its bullish trend. Despite the fact that the news background remains on the side of the bulls, bears have attacked more frequently in recent months. Still, I see no realistic reasons for the start of a bearish trend.

From imbalances 1, 2, 4, and 5, traders had opportunities to buy the euro. In all cases, we saw some growth. Traders also had opportunities to open new trend-following long positions after a reaction from bullish imbalance 3, after a reaction from imbalance 8, and then after a rebound from imbalance 9. This week, a second reaction from bullish imbalance 9 may still occur. The upside target for the euro remains the 1.1976 level. New long trades are acceptable if a new bullish signal is formed. If not, the long strategy will need to be reconsidered.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD. Smart Money. The Pound Gains the Needed Momentum

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The GBP/USD pair is showing growth on Monday that few could have expected on Saturday or Sunday. However, it became known overnight on Monday that a criminal case has been opened against Jerome Powell over excessive and unjustified spending on the renovation of Federal Reserve buildings, as well as knowingly false statements made to the U.S. Congress. After this, bears began to retreat sharply from the market, and the dollar returned to its favorite activity in the "Trump era" — falling. I would remind you that Trump attempted to dismiss the Fed Chair as early as last summer, but this is not so easy to do when you lack both the authority and legal grounds for dismissal. It took a long six months for the Department of Justice to review all documents and cost estimates and to deliver a verdict on the possible misuse of budget funds. The Department of Justice, by the way, has not yet reached such a conclusion, but the process has been launched. Now Powell will at least have to defend himself, and the markets responded with massive selling of the currency whose control (via the Fed) Trump is seeking to establish.

The "bullish" imbalance 12 currently remains the only viable pattern. If it is invalidated, this will not lead to an immediate cancellation of the bullish trend. It would only delay the pound's next ascent. However, at the moment, a new bullish signal may be formed within this pattern, as I warned last week. Bullish traders had to wait for help from Trump to move into a new offensive, but all's well that ends well. There are no other signals/liquidity grabs/patterns at this time.

The chart picture is now as follows. The bullish trend in the pound can be considered complete, but the bullish trend in the euro cannot. Both the euro and the pound may already form new bullish signals along the current trend today. Both European currencies were on the verge of a pause in the trend, but Donald Trump came to the rescue and tripped up the U.S. dollar once again. Thus, I continue to expect growth in the British pound.

There were no economic reports on Monday, but the market had plenty to react to. The criminal prosecution of Powell, which could turn into a prison sentence and a disgraceful dismissal from the Fed, is an event of global significance. To one degree or another, everyone understands that this is Trump's personal desire and revenge against the FOMC Chair in response to his refusal to pursue aggressive monetary easing. As a result, trust in the Fed will steadily decline, and with it, the U.S. dollar exchange rate.

In the United States, the overall news backdrop remains such that nothing but a decline in the dollar can be expected in the long term. The situation in the U.S. remains quite difficult. The shutdown lasted a month and a half; Democrats and Republicans agreed on funding only through the end of January, which expires in three weeks. U.S. labor market data continues to disappoint. The last three FOMC meetings ended with dovish decisions, and the latest data suggests that the pause in monetary easing will be short-lived. Trump's military aggression, threats toward Denmark, Mexico, Cuba, and Colombia, as well as the initiation of criminal proceedings against Jerome Powell, perfectly complement the current picture unfolding in the United States. In my view, the bulls have everything they need to continue a new offensive and achieve a return to last year's peaks.

A bearish trend requires a strong and stable positive news background for the U.S. dollar, which is difficult to expect under Donald Trump. Moreover, the U.S. president himself does not need a strong dollar, as the trade balance would remain in deficit in that case. Therefore, I still do not believe in a bearish trend for the pound, despite the fairly sharp decline in September and October. Too many risk factors continue to hang like dead weight over the dollar. What exactly are the bears going to use to push the pound further down if a bearish trend is supposedly forming now? If new bearish patterns appear, a potential decline in the pound sterling can be reconsidered, but at the moment there are none.

News Calendar for the U.S. and the U.K.:

• United States – Consumer Price Index (13:30 UTC)
• United States – New Home Sales (13:30 UTC)

On January 13, the economic events calendar contains two entries, one of which is considered important. The impact of the news background on market sentiment on Tuesday will be present in the second half of the day.

GBP/USD Forecast and Trader Advice:

For the pound, the picture remains favorable for traders. Four bullish patterns have been worked out, signals have been formed, and traders can maintain long positions. I see no informational grounds for a sharp fall in the pound in the near future.

The resumption of the bullish trend could have been expected as early as from imbalance zone 1. At the moment, the pound has reacted from imbalance 1, imbalance 10, imbalance 11, and imbalance 12. Today, another bullish signal may be formed in imbalance 12. As a potential upward target, I am considering the 1.3725 level, but the pound may rise much higher in 2026. If bearish patterns form, the trading strategy may need to be revised, but at the moment there are no grounds for doing so.

The material has been provided by InstaForex Company - www.instaforex.com.

USD/JPY: Tips for Beginner Traders on January 12th (U.S. Session)

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Trade Analysis and Tips for Trading the Japanese Yen

The test of the 157.96 price level occurred at a moment when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential.

The Japanese yen received some temporary relief against the U.S. dollar following news that the U.S. Department of Justice had initiated criminal proceedings against the head of the Federal Reserve. Investors, alarmed by developments surrounding the head of the U.S. regulator, rushed to pull assets out of the dollar, as a result of which the yen strengthened temporarily. However, this short-term appreciation of the yen may turn out to be only a temporary phenomenon that does not reflect long-term trends. Fundamental factors, as well as the economic outlook of both countries, will continue to have a significant impact on the currency pair. Moreover, the criminal prosecution of the Fed Chair creates additional uncertainty in the market.

During the U.S. trading session, attention will shift to a speech by FOMC member Thomas Barkin. He is expected to comment on the recent decline in unemployment in the United States. His remarks may provide insight into the Federal Reserve's future actions regarding interest rates. Market participants and analysts will closely examine his every word, seeking to understand how sustainable the decline in unemployment is and how it may affect inflationary processes. If Barkin emphasizes that falling unemployment is not the sole determining factor for Fed policy and that the regulator will continue to monitor other economic indicators such as inflation and GDP dynamics, the dollar may face some pressure and continue to lose ground against the yen.

As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today upon reaching the entry point around 158.00 (green line on the chart), with a target of growth toward 158.39 (thicker green line on the chart). Around 158.39, I will exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points in the opposite direction from the level). Continued growth of the pair can be expected in line with the trend.Important! Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 157.76 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upward. Growth toward the opposite levels of 158.00 and 158.39 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after an update of the 157.76 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 157.37 level, where I will exit short positions and also immediately open long positions in the opposite direction (expecting a move of 20–25 points in the opposite direction from the level). Pressure on the pair will return today in the event of a dovish stance by the Fed.Important! Before selling, make sure the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 158.00 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline toward the opposite levels of 157.76 and 157.38 can be expected.

What's on the Chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price at which Take Profit can be set or profits can be fixed manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price at which Take Profit can be set or profits can be fixed manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner Forex traders need to be very cautious when making market entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD: Tips for Beginner Traders on January 12th (US Session)

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Trade review and tips for trading the British pound

The test of the 1.3422 price level occurred at a moment when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. For this reason, I did not buy the pound. The second test of this price level occurred when the MACD was in overbought territory, which led to the implementation of Sell Scenario No. 2. However, the pair ultimately failed to move lower.

During the US session, attention will shift to a speech by FOMC member Thomas Barkin. Barkin's remarks may shed light on the Federal Reserve's future plans regarding interest rates, although I believe it is already clear to many that the regulator will leave rates unchanged at the meeting at the end of this month. Traders and analysts will closely monitor Barkin's statements, trying to assess how sustainable the recent decline in unemployment is and how it may affect inflation. If Barkin expresses concern about the labor market, this could push the Fed toward a more dovish stance on rates, which in turn could further weaken the US dollar.

As for the intraday strategy, I will primarily rely on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound upon reaching the entry point around 1.3483 (thin green line on the chart), with a growth target at 1.3520 (thicker green line on the chart). Around 1.3520, I plan to exit long positions and open short positions in the opposite direction (aiming for a move of 30–35 points in the opposite direction from that level). Pound growth today can be expected to continue the morning trend.Important: Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the case of two consecutive tests of the 1.3455 level when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.3483 and 1.3520 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after an update of the 1.3455 level (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers will be the 1.3417 level, where I will exit short positions and also immediately open long positions in the opposite direction (aiming for a move of 20–25 points in the opposite direction from that level). Pressure on the pound may return today if Barkin takes a hawkish stance.Important: Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today in the case of two consecutive tests of the 1.3483 level when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3455 and 1.3417 can be expected.

What's on the chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price at which Take Profit can be set or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price at which Take Profit can be set or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner Forex traders should be extremely cautious when making market entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop-loss orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD: Tips for Beginner Traders on January 12th (US Session)

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Trade review and tips for trading the European currency

The test of the 1.1677 price level occurred at a moment when the MACD indicator had already moved significantly above the zero line, which limited the pair's further upward potential. For this reason, I did not buy the euro.

Amid reports of the US Department of Justice launching criminal proceedings against Federal Reserve Chairman Jerome Powell, market participants intensified selling of the US dollar. The sharp increase in US dollar selling provided substantial support to the euro. Economists are expressing serious concerns about the possible consequences of the unfolding crisis. Not only the reputation of the Federal Reserve is under threat, but also confidence in the US financial system as a whole. There is an opinion that criminal prosecution of the central bank head could call into question the principles of democratic economic governance and trigger a wave of instability in global markets. At the same time, there is no need to draw hasty conclusions: a similar situation involving Powell occurred last year and ended without consequences.

Since no macroeconomic data releases are expected in the second half of the day, traders' attention will remain focused on the news already published. The situation may change slightly after a speech by FOMC member Thomas Barkin, but no significant shifts are expected.

As for the intraday strategy, I will focus primarily on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, buying the euro is possible if the price reaches the 1.1696 level (green line on the chart), with a growth target at 1.1729. At the 1.1729 level, I plan to exit the market and also sell the euro in the opposite direction, aiming for a move of 30–35 points from the entry point. A strong rise in the euro can be expected after dovish comments from Fed representatives.Important: Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1674 level at a time when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.1696 and 1.1729 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1674 level (red line on the chart). The target will be the 1.1641 level, where I intend to exit the market and immediately buy in the opposite direction (aiming for a move of 20–25 points in the opposite direction from that level). Pressure on the pair is unlikely to return today.Important: Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today in the case of two consecutive tests of the 1.1696 level at a time when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.1674 and 1.1641 can be expected.

What's on the chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price at which Take Profit can be set or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price at which Take Profit can be set or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner Forex traders should be extremely cautious when making market entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop-loss orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/JPY. Analysis and Forecast

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At the time of publication on Monday, the EUR/JPY pair is trading near 184.45, showing a daily gain of 0.45%, driven by a combination of positive signals for the euro and weakness in the Japanese yen.

The Sentix Investor Confidence Index for the eurozone improved in January to -1.8 from -6.2 in December, indicating a recovery in optimism regarding the region's economic outlook. This jump highlights a revival of positive sentiment, although its direct impact on the euro exchange rate remains moderate.

The Japanese yen is facing additional pressure amid news that Prime Minister Sanae Takaichi may dissolve the House of Representatives as early as the end of January, followed by snap elections in February. According to Kyodo News and Yomiuri, this prospect came as a surprise to markets and heightens concerns about a new wave of political instability in Japan, which traditionally weighs on the yen due to its heightened sensitivity to such risks.

Uncertainty surrounding monetary policy also persists. Bank of Japan Governor Kazuo Ueda confirmed readiness to further raise interest rates if inflation-related economic indicators align with forecasts. However, the lack of clarity regarding the timing of such a move limits any strengthening of the yen.

As a result, the current balance of fundamental forces continues to favor further growth in the EUR/JPY pair, as yen weakness significantly outweighs the absence of strong growth catalysts for the euro. Today, the euro is showing the greatest strength specifically against the Japanese yen among the major currency assets.

From a technical perspective, support for the pair is located at the convergence of three moving averages around the 183.50 level, with the round 183.00 level below. The pair has encountered resistance at 184.45; above this level, it could move toward the December high at 184.95. Oscillators on the daily chart are positive, suggesting that the path of least resistance for EUR/JPY remains to the upside.

The material has been provided by InstaForex Company - www.instaforex.com.

Dollar: key drivers and outlook

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The dollar is declining at the start of the new week. US Treasury yields are also falling on Monday, adding further pressure on the dollar.

Last week was characterized by dollar strength amid rising inflation and ongoing uncertainty surrounding potential Federal Reserve decisions.

The recent nonfarm payrolls showed job growth of only 50,000 versus expectations of 66,000, while unemployment unexpectedly fell to 4.4%. Average hourly earnings rose faster than forecast, reaching 3.8% year-over-year. Despite signs of cooling in the labor market, analysts believe the situation is far from as dramatic as initially thought.

In addition, the preliminary University of Michigan Consumer Sentiment Index for January, also released on Friday, rose to 54.0 from 52.9 in December, exceeding the forecast of 53.5.

Overall, last week's data support a more optimistic economic outlook and reduce the need for emergency interest rate cuts.

As is known, in December the Fed cut its policy rate by 0.25%. However, the minutes of that meeting revealed serious disagreements among committee members regarding monetary policy.

Following the release of macroeconomic data, expectations regarding the next steps by US monetary authorities were revised.

Economists now expect the Fed to cut borrowing costs by 25 basis points in June and September, rather than in March and June as previously anticipated.

Meanwhile, the CME Group FedWatch tool currently indicates a 95% probability of a pause in January.

At the same time, particular attention is being paid to the criminal case against Fed Chair Jerome Powell related to the $2.5 billion renovation of the central bank's building. Powell himself has called the charges political manipulation aimed at undermining the regulator's independence and altering monetary policy. A possible change in Fed leadership could trigger a sharp decline in the dollar.

After testing the strong resistance level at 99.13 (EMA144 on the daily chart) on Friday, USDX futures declined today and at the start of the US trading session toward the support level at 98.72 (EMA50 on the daily chart). However, given that USDX futures are still maintaining upward momentum in the short term, a rebound from the 98.72–98.60 support zone (EMA200 on the 1-hour chart) and a resumption of the upward corrective move can be expected.

If this scenario plays out, a more successful retest and breakout of resistance at 99.13 could create the conditions for a move toward the key resistance level at 99.60 (EMA200 on the daily chart), which separates the medium-term bearish dollar market from a bullish one. A breakout of this level, followed by a breakout above 99.90 (EMA50 on the daily chart), would confirm the revival of a medium-term bullish USDX trend, with upside potential toward the upper boundary of the ascending channel on the weekly USDX chart, which also coincides with the key long-term resistance level at 101.45 (EMA144 on the weekly chart).

In a negative scenario for the dollar, a break below the 98.60 support level would fully return the price into bearish territory, opening the way for a decline toward the strategic support level at 96.80, which separates the global bullish USDX market from a bearish one.

Conclusion

• Dollar dynamics are driven by a combination of economic data, political events, and market expectations.
• The criminal proceedings involving Powell add further uncertainty and exert negative pressure on the dollar.
• Technical levels and fundamental data will serve as key reference points for investors in the coming days.

Further developments in the dollar outlook in the near term will depend on inflation dynamics (CPI data are scheduled for release on Tuesday at 13:30 GMT, and producer inflation PPI on Wednesday) as well as statements by Federal Reserve officials, including today's speeches by Atlanta Fed President Raphael Bostic (17:30 GMT) and New York Fed President John Williams (23:00 GMT).

The market is awaiting clear signals from US monetary authorities to determine the next steps. Current market conditions remain uncertain, but the risks of a significant strengthening of the dollar persist, especially if inflation continues to rise.

We will continue to monitor developments closely and make well-balanced investment decisions.

The material has been provided by InstaForex Company - www.instaforex.com.

Black swan got in dollar's way

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Every cloud has a silver lining. The lawsuit against the Fed chairman, accusing him of incompetence in overseeing the renovation of the central bank's building, became a black swan for the US dollar. Both the lawsuit itself and Jerome Powell's subsequent statement about political pressure and intimidation made a stronger impression on investors than the long-anticipated US employment report. EUR/USD managed to find a bottom and rebound from it—and how! The euro had not seen such a rapid one-day rally in more than a month.

Dynamics of bets on the US dollar against G10 currencies

The unexpected event turned everything upside down in the FX market. Prior to this, traders had been revising their views on the US dollar. A prolonged pause in the Fed's monetary easing cycle had turned it from an ugly duckling into a beautiful swan. Job growth of 50,000 and a decline in unemployment to 4.4% in December pushed expectations for a federal funds rate cut from March–April to June. Even if other central banks move toward keeping borrowing costs unchanged, a long pause in the cycle makes the greenback a favorite.

Donald Trump's impatience changes everything. The US president wants to fill the FOMC with his own people as quickly as possible in order to cut the federal funds rate to 1% or lower. At first glance, this looks unrealistic in an economy as strong as that of the United States. However, let us recall how aggressively a White House appointee on the Committee, Steve Miran, intends to slash borrowing costs. In his view, rates should fall by 150 basis points to 2.25% as early as 2026.

Dynamics and forecasts of central bank interest rates

If people like him make up half of the Committee, aggressive monetary easing will become a reality.

In my view, the story of the lawsuit against Jerome Powell is not worth a dime. First, the Fed chairman has stated that he does not intend to give in to pressure from the White House. Second, a highly influential Republican senator, Thom Tillis, has threatened not to vote for any candidate for the new Fed chair until the legal proceedings against the current one are concluded. As a result, neither Kevin Hassett nor Kevin Warsh—Donald Trump's main favorites—will be confirmed by Congress.

Finally, the Federal Reserve is not a one-man show. Decisions are made collectively. Even if the chair insists on rate cuts, the rest of the FOMC members will keep their heads. Against this backdrop, the EUR/USD's rally looks overly emotional.

From a technical standpoint, the daily chart of the main currency pair shows an attempt by the bulls to bring prices back into the fair value range of 1.169–1.180. Success in this effort would allow EUR/USD to extend its rally. Conversely, failure would provide grounds for opening or adding to previously established short positions in the euro against the US dollar.

The material has been provided by InstaForex Company - www.instaforex.com.

USD risks entering large-scale slump amid high odds of earlier-than-expected Fed rate cut

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The year 2026 began without any warm-up. As soon as the champagne had been poured into New Year's glasses, geopolitical shocks rattled markets due to the abduction of Venezuela's president by US special services and an open demand to "cede Greenland." Besides, news emerged that Fed Chair Jerome Powell was under investigation by the US prosecutor's office.

Although the investigation concerns a fairly mundane issue related to the renovation of the Federal Reserve's Washington headquarters, there is little doubt that the real reason for the pressure on Powell lies in the Trump administration's intention to push the Federal Reserve into cutting interest rates. Jerome Powell is known for his cautious stance on interest rates, and this clearly does not suit Trump.

Such news is bearish for the US dollar and bullish for gold, which once again comfortably renewed its all-time high. It is unclear whether the US dollar will be able to strengthen, as the labor market report released on Friday showed that employment problems in the US may be far deeper than currently assumed.

Nonfarm payrolls rose by 50,000, slightly below forecasts, while figures for the previous two months were revised downward by 76,000. As a result, a total of 67,000 jobs were lost in the fourth quarter. Since April, employment outside agriculture and healthcare has fallen by approximately 354,000. Given such data, it is hard to seriously argue that the US economy is growing confidently.

What is clear, however, is that Trump may be more right than wrong: the current labor market situation appears even more important than still-elevated inflation and represents a powerful incentive to cut rates faster—possibly as early as January. Markets currently price in two rate cuts this year, in June and September, while January expectations imply a 95% probability that rates will remain unchanged. This confidence has helped the dollar hold its ground—but what if the market ultimately takes the employment situation into account?

For now, markets are operating under forecasts that US GDP will grow at around 2% this year, rates will be cut twice, and 10-year Treasury yields will remain near current levels. Such a scenario implies stability. However, as we can see, pressure on the Federal Reserve is intensifying, while the labor market is calling GDP growth prospects into question. The CFTC report showed that investors remain bearish on the dollar: over the week, the aggregate short position in dollars against major global currencies increased by $1.3 billion to -$11.9 billion. This imbalance is driven almost entirely by one currency—the euro—where the long position reached $23.8 billion. Against other currencies, except the yen and the Mexican peso, the dollar looks slightly stronger, but this advantage is minimal.

In other words, the key factors that could influence the dollar's exchange rate currently appear more negative than positive. Inflation has so far remained outside the focus, as price growth has not materialized in recent months despite fears that new tariffs would push prices higher. These concerns were based on calculations suggesting that higher tariffs would inevitably be passed on to consumers, as large companies could only partially offset tariffs through reduced profits and some optimization, leaving the main burden to fall on consumers.

On Tuesday, the December consumer inflation report will be released, followed by producer prices and retail sales for November on Wednesday. If inflation shows signs of slowing, pressure on the Fed is likely to intensify, making markets revise forecasts for interest rates, thus increasing pressure on the US dollar. If inflation comes in above expectations, market reaction could be even more unpredictable but would most likely result in a stronger dollar against commodity currencies, its weakness against the yen, and another record high in gold.

The material has been provided by InstaForex Company - www.instaforex.com.

Bitcoin fleeing battlefield

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Hope sustains young people and offers comfort to the old. Bitcoin fans believe that a breakout above the $95,000 resistance level would allow the cryptocurrency to soar to $200,000. Opponents of digital currencies, on the contrary, warn that a drop below $85,000 would force crypto treasuries to sell their tokens. The entire system, including BTC/USD, would collapse like a house of cards.

Under such conditions, Bitcoin's consolidation comes as no surprise. Rumors that MSCI would exclude crypto companies from its indices pushed prices lower. However, as soon as the information was not confirmed, BTC/USD rocketed higher. To the disappointment of the bulls, the rally looked more like a relief than a revival. Although Bitcoin ETFs recorded their largest daily inflows in several months, investors preferred to remain cautious—and they were right.

Dynamics of capital flows into Bitcoin ETFs

One reason for traders' optimism toward cryptocurrencies was the passage of US stablecoin legislation by Congress. In reality, however, the greatest benefits were reaped entirely by stablecoins. Transaction volumes using them surged by 72% in 2025, reaching $33 trillion. USDC took the lead with a turnover of $18.3 trillion, followed by USDT with $13.3 trillion.

Bitcoin is also under pressure from a report by industry pioneer Strategy, a crypto-treasury company. Michael Saylor's firm reported unrealized losses of $17.44 billion in the fourth quarter. Its shares have fallen 70% from their record highs. At the same time, investors fear that a further decline in BTC/USD could trigger token sales by Strategy and similar companies. As a result, the cryptocurrency could collapse like a house of cards.

Dynamics of the ratio between Strategy's assets and its reserves

Bitcoin is not helped by new record highs in the S&P 500 and gold. For a long time, the digital asset was seen as something between a risky and a safe-haven instrument. It often rose during rallies in the US stock market. BTC/USD also received support from various shocks that simultaneously drove precious metals higher.

At the turn of 2025–2026, everything changed. The gold rally is now hindering rather than helping BTC/USD. Bitcoin is under pressure, among other things, due to capital flows into precious metals and US stocks. It has stopped rising, and investors have begun to redirect their money.

The same rotation is taking place in the US stock market. Shares of technology giants are being replaced by small-cap companies. Bitcoin has had a high correlation with the Nasdaq 100, so consolidation in this index contributes to the formation of a trading range in the cryptocurrency.

From a technical perspective, the daily BTC/USD chart shows consolidation in the $84,000–$94,000 range after an unsuccessful test of its upper border. The formation of a pin bar with a long upper shadow signals weakness among the bulls. A break below the fair value level at $87,750 becomes a trigger for selling.

The material has been provided by InstaForex Company - www.instaforex.com.

AUD/JPY. Analysis and Forecast

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The AUD/JPY pair has maintained a confident upward momentum for the second consecutive day and, at the start of the European session on Monday, is rising toward the round 106.00 level, reaching a new high since July 2024. The current news and fundamental backdrop generally supports the bullish scenario and indicates that the path of least resistance for the pair is to the upside.

The Japanese yen remains under pressure amid uncertainty regarding the timing of the next interest rate hike by the Bank of Japan and rising tensions in relations between Tokyo and Beijing. Last week, China deepened its dispute with Japan by imposing restrictions on the export of dual-use goods, including a number of rare earth elements. This increases risks to supply chains for Japanese manufacturers and puts additional pressure on the yen, thereby supporting further gains in AUD/JPY.

Another source of uncertainty is Japan's domestic political backdrop. According to Yomiuri, Prime Minister Sanae Takaichi is considering the possibility of holding early parliamentary elections in the first half of February. This increases political risks and strengthens expectations of further yen depreciation in the near term.

In contrast, the Australian dollar is receiving support from expectations of further monetary policy tightening by the Reserve Bank of Australia (RBA) in the foreseeable future. The RBA rate outlook provides an additional positive impulse for AUD/JPY and generally confirms a favorable short-term outlook for the pair. However, given cautious sentiment in global markets, investors may want to approach the opening of new long positions carefully.

At the same time, the prevailing geopolitical backdrop—including the US invasion of Venezuela, threats by US President Donald Trump to use military force in response to unrest in Iran, the White House's persistent push to acquire Greenland, as well as the ongoing Russia–Ukraine conflict—continues to support investor nervousness. Such a risk configuration could strengthen the Japanese yen's status as a safe-haven asset and simultaneously act as a restraining factor for the risk-sensitive Australian dollar, which in theory may limit the potential for further upside in AUD/JPY at the current stage.

From a technical perspective, the pair is trading above all major indicators and has reached the round 106.00 level, which has become an obstacle to further growth. Oscillators on the daily chart are positive, but the Relative Strength Index is close to overbought territory, suggesting the possibility of some consolidation or a corrective pullback.

The material has been provided by InstaForex Company - www.instaforex.com.