Market Overview

Global markets opened the week in a defensive posture as gold reclaimed the $5,000 psychological level, driven by renewed safe-haven demand and broad U.S. dollar weakness. Persistent central-bank buying and positioning ahead of major U.S. economic data added momentum to the move.

The U.S. dollar came under pressure amid concerns over foreign demand for Treasuries and heightened uncertainty surrounding upcoming Nonfarm Payrolls, CPI, and Retail Sales data. The Dollar Index drifted toward fresh short-term lows, allowing major counterparts to advance.

In Asia, Japanese politics dominated headlines. Prime Minister Sanae Takaichi’s landslide election victory triggered sharp volatility in the yen. Initial weakness in USD/JPY was followed by a strong reversal as officials signaled they are closely monitoring FX movements, reviving speculation of potential intervention near key levels.

Meanwhile, the euro strengthened as the European Central Bank downplayed concerns about currency appreciation, and crude oil briefly rallied on renewed Strait of Hormuz risk before trimming gains on profit-taking.

With gold consolidating near highs, yen volatility elevated, and the dollar awaiting decisive U.S. data catalysts, markets face a potentially pivotal week across FX, commodities, and global indices.

Technical Analysis

USD/JPY – Pullback Tests Key Support

USD/JPY entered a corrective phase after rejecting resistance near 159.05. Momentum indicators lean cautiously bearish, with RSI near neutral and MACD confirming a bearish crossover.

Price is currently testing the 20- and 50-day EMA cluster, an important medium-term support zone. While the broader uptrend remains intact above the 100- and 200-day EMAs, a sustained break below 152.15 could expose downside toward 150.40. Stabilization above current levels would preserve the longer-term bullish structure.

Key Levels:
Resistance: 159.05, 163.90
Support: 152.15, 150.40

EUR/USD – Bullish Structure Remains Firm

EUR/USD continues to display strong bullish momentum. RSI holds above 60, MACD shows a positive crossover, and price remains above all major moving averages.

The pair is approaching the 1.2000 resistance zone. A decisive breakout could extend gains toward 1.2250. On the downside, pullbacks toward 1.1595 are likely to attract buying interest while the broader trend remains intact.

Key Levels:
Resistance: 1.2000, 1.2250
Support: 1.1595, 1.1510

XAU/USD – Gold Holds Bullish Bias Above $5,000

Gold remains structurally bullish after reclaiming the $5,000 level. RSI remains in positive territory, though MACD histogram contraction and narrowing Bollinger Bands suggest consolidation after a strong rally.

Holding above 4,660 preserves the broader upside bias, with resistance seen near 5,400–5,500. A breakout from the current consolidation range is likely to define the next directional move.

Key Levels:
Resistance: 5,400, 5,500
Support: 4,660, 4,530

Key Economic Developments

Gold Rebound Driven by USD Weakness

Gold futures climbed back above $5,000 as the U.S. dollar softened and safe-haven demand rebuilt. Continued central-bank accumulation and uncertainty ahead of major U.S. data releases supported the rebound.

Markets remain highly sensitive to incoming inflation and labor data, which will shape Federal Reserve rate-cut expectations and drive near-term volatility in bullion.

Oil Reacts to Hormuz Headlines

WTI crude advanced as renewed Middle East tensions revived geopolitical risk premiums. Reports of caution around Iranian waters and shipping routes added support, though gains faded as traders locked in profits.

Oil direction remains headline-driven, with geopolitical risks offset by oversupply narratives and weekly inventory data.

Yen Volatility Following Japanese Election

Prime Minister Takaichi’s strong mandate raised expectations of fiscal stimulus, initially weakening the yen. However, official commentary about monitoring FX movements reversed losses, reintroducing intervention risk near 160 in USD/JPY.

The yen remains highly sensitive to fiscal policy, debt dynamics, and potential Bank of Japan responses.

Euro Gains as ECB Stays Steady

The ECB maintained policy settings and expressed confidence in inflation stabilization. With balanced growth risks and limited concern over currency strength, the euro benefited from broader dollar weakness.

Dollar Awaits Data Confirmation

Despite softening recently, the U.S. dollar remains data-dependent. Markets are closely watching U.S. Retail Sales and broader inflation indicators for confirmation of the Federal Reserve’s easing trajectory.

Until clearer economic deterioration emerges, volatility around USD positioning is expected to remain elevated.

Upcoming Economic Indicators – February 10

AUD: Westpac Consumer Confidence, NAB Business Confidence
USD: Retail Sales MoM

Stronger-than-expected data may reduce easing expectations and support the respective currency, while weaker figures could reinforce rate-cut narratives.

Conclusion

Gold’s move back above $5,000 signals renewed defensive positioning, while Japanese political developments have injected fresh volatility into FX markets. With the dollar at a crossroads ahead of critical U.S. data, this week may determine whether risk-off momentum deepens or stabilizes.