Market Overview

Global markets are navigating a volatile transition phase marked by shifting monetary expectations, political clarity in Japan, and critical technical inflection points across major assets. The Japanese yen has emerged as the dominant driver in FX after Prime Minister Sanae Takaichi’s landslide election victory revived expectations of further Bank of Japan tightening and heightened intervention sensitivity near key USD/JPY levels.

The U.S. dollar remains pressured following flat Retail Sales data, softer labor indicators, and declining Treasury yields, all of which reinforce expectations for Federal Reserve rate cuts in 2026. The Dollar Index continues to trade near short-term lows, allowing major counterparts to maintain constructive structures.

Gold has pulled back modestly from recent highs but remains firmly anchored above the $5,000 psychological level, supported by dovish Fed pricing, central bank accumulation, and lingering geopolitical risk. Meanwhile, crude oil remains range-bound as fading U.S.–Iran risk premiums offset ongoing supply-side uncertainties.

With Non-Farm Payrolls, CPI, and China inflation data ahead, markets are positioned for elevated volatility and potentially decisive directional breaks.

Technical Analysis

USD/JPY – Bearish Pressure Intensifies Below Key Averages

USD/JPY has broken below its 20, 50, and 100 EMAs, signaling a clear shift in near-term momentum. RSI remains in bearish territory while MACD confirms downside acceleration. Price action along the lower Bollinger Band, combined with expanding volatility, reinforces sustained selling pressure.

Although the pair still trades above the 200 EMA—preserving the long-term bullish framework—the loss of medium-term support exposes downside risk toward 152.15 and potentially 150.40. Only a recovery above 159.05 would meaningfully stabilize sentiment.

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

EUR/USD – Bullish Structure Holds Despite Cooling Momentum

EUR/USD continues to trade above all major EMAs, maintaining a constructive bullish structure. RSI remains supportive, and MACD signals sustained upside bias, although momentum is moderating following recent gains.

Holding above 1.1595 keeps the broader bullish narrative intact, with 1.2000 acting as the immediate breakout threshold. A sustained move beyond this level would open the path toward 1.2250, while pullbacks remain corrective unless key supports fail.

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

USOIL – Consolidation Phase Within Recovery Structure

Crude oil maintains a constructive tone after reclaiming key moving averages. RSI remains in bullish territory and MACD shows expanding upside pressure, though narrowing Bollinger Bands suggest consolidation ahead of the next breakout attempt.

A decisive move above 65.70 would target 70.30, while a break below 61.75 could trigger corrective retracement without invalidating the broader recovery.

Key Levels:
Resistance: 65.70, 70.30
Support: 61.75, 58.45

Key Economic Developments

Gold Pulls Back but Remains Structurally Supported

Gold futures settled modestly lower near $5,003 after profit-taking ahead of major U.S. macro releases. Despite short-term volatility, the broader macro backdrop remains supportive. Softer U.S. activity data, cooling labor costs, and rising expectations of Fed easing in 2026 continue to reduce the opportunity cost of holding bullion.

Central bank demand, particularly ongoing purchases by the People’s Bank of China, reinforces structural support. The $5,000 level remains pivotal for near-term sentiment.

Oil Trades Sideways as Risk Premium Fades

Crude oil prices stabilized around the $64 region as easing tensions between the U.S. and Iran trimmed geopolitical premiums. However, supply uncertainties tied to Venezuela exports and Russia-related disruptions prevent a decisive downside break.

Oil remains caught between geopolitical recalibration and supply-demand rebalancing narratives.

Yen Strength Accelerates on BoJ Tightening Expectations

The yen extended gains after Takaichi’s election victory increased confidence in fiscal delivery while raising expectations that the BoJ may need to normalize policy more decisively. Intervention rhetoric near key USD/JPY levels added to upward pressure on the currency.

JPY crosses remain vulnerable to continued volatility as fiscal expansion and tightening bets interact.

Dollar Softens on Weak Data

The dollar weakened broadly after stagnating Retail Sales and falling Treasury yields reinforced Fed easing expectations. Markets now look to Non-Farm Payrolls and CPI for confirmation of economic deceleration.

Until data surprises shift expectations materially, the dollar remains sensitive to downside risks.

Upcoming Economic Catalysts

China inflation data will offer insight into global demand dynamics and deflation risks. U.S. Non-Farm Payrolls remain the primary volatility trigger for the dollar, yields, equities, and gold. Canadian Building Permits will provide signals on domestic growth momentum and potential Bank of Canada policy implications.