Market analysis

Date: Monday 12th of January 2026

EUR/USD : Employment, inflation? No, Trump to shape US Dollar future .

GBP/USD : Can Pound Sterling withstand renewed US Dollar demand?

USD/JPY : D rifts higher above 158.00 as Takaichi is considering calling a snap election .

Dow Jones : Stocks rally, dollar higher in wake of US jobs numbers .

Gold : Geopolitics, US inflation data to trigger next directional movement s .

Crude Oil : G ains as market weighs Iran, Russia supply risks; dealmaking for Venezuela in focus .

EUR/USD

Employment, inflation? No, Trump to shape US Dollar future.

The EUR/USD pair started the new year with a soft tone, falling for a second consecutive week to settle around 1.1640, its lowest in a month. The US Dollar (USD) stands victorious across the FX board, backed by geopolitical uncertainty and pretty solid United States (US) employment data. The world woke up on Saturday knowing that US President Donald Trump conducted a surgical military operation in Venezuela, capturing now former President Nicolás Maduro and his wife, Cilia Flores, and taking them to the US to face narco-terrorism charges. Delcy Rodriguez, Maduro’s Vice-President, now leads Venezuela, and despite some initial outrage against Trump, she quickly changed her speech and pledged to collaborate with the US . Trump did not lie about his reasons to take over the troubled country: In a press conference that followed the initial events, Trump said the US would take control of Venezuelan oil and threatened to take more action should the current government defy him. He also said that the US will “run” the country. The word “transition” was mentioned in reference to the country's future government, but no details were provided. The word “democracy” was never mentioned. As the week went by, tensions eased, and the conflict moved to the background, but it’s far from resolved. Still, it’s worth mentioning that Venezuela was providing oil to Russia and China, and Trump’s decision to take over Venezuela is clearly linked to putting pressure on his two rivals. Across the pond, Russia conducted a massive missile strike on Ukraine early on Friday, in the west of the country near the border with Europe. The strike came a few days after Ukraine’s European allies agreed to provide key elements of postwar security guarantees in the event of a ceasefire with Russia. The attack was clearly a challenge by Russian President Vladimir Putin to his Western rivals. Putin wants to show the world that he does not care about any sanctions, even those that limit oil provisions to Russia. Other than that, US President Trump opened a new front of tension: He wants to annex Greenland, an autonomous part of Denmark. Trump claims that he needs the independent territory located in the Arctic “from the standpoint of national security.” Indeed, Greenland is physically closer to America than to Europe, but Trump's claims are completely out of context. Throughout the week, fears of military action in the territory receded, as Trump claimed he wanted to buy the land. News coming from Europe has no impact on the Euro (EUR). Seems logical given that the Eurozone has reached a delicate stability, where growth continues, inflation remains at tolerable levels and employment is far from a concern. Eurostat reported that the Euro area seasonally adjusted unemployment rate was 6.3% in November, down from 6.4% in October 2025 and up from 6.2% in November 2024. The EU unemployment rate was 6.0% in November 2025, stable compared with October 2025 and up from 5.8% in November 2024. Additionally, the Hamburg Commercial Bank (HCOB) released the final estimates of the December Services and Composite Purchasing Managers’ Indexes (PMIs) for the Eurozone. “The euro area economy registered a twelfth successive month-on-month rise in private sector business activity at the end of the year,” according to the latest survey data. The Composite PMI printed at 51.5, easing from the 52.8 posted in November. Services output also shrank to 52.4 from the previous 53.6, both indexes at three-month lows. On the inflation front, Germany published the preliminary estimate of the December Harmonized Index of Consumer Prices (HICP), which rose 2% on a yearly basis, down from the 2.6% posted in November and below the 2.2% anticipated by market players. On a monthly basis, the HICP was up 0.2%, half the 0.4% expected. The Eurozone HICP in the same period rose by 2% on a yearly basis, as expected. Finally, the monthly HICP rose 0.2% after decreasing 0.2% in November. There were some tepid figures from Germany, as the country reported that Retail Sales were down 0.6% in November, while Industrial Production was up a modest 0.8% in the same month. When it comes to the European Central Bank (ECB), Vice President Luis de Guindos said in an interview with Bloomberg that the current level of interest rates is adequate, noting the central bank is at its inflation target, but added that uncertainty remains very high. His words represent to the dot the ECB’s current monetary policy stance: policymakers are done with rate moves at the time, but “remain vigilant.” The US macroeconomic calendar was packed with relevant data, most of it indicating economic progress. The Institute for Supply Management (ISM) reported the December Manufacturing Purchasing Managers' Indexes (PMIs). Manufacturing output contracted in the month, with the index declining to 47.9 from 48.2 in November. This print came in worse than the market expectation of 48.3. However, the Employment Index improved slightly to 44.9 from 44 in November, while the Prices Paid Index, the inflation component, remained unchanged at 58.5. The services index, on the contrary, improved to 54.4 from 52.6 in November. The employment sub-component also rose, to 52 from 48.9, while the Price Paid Index eased to 64.3 from 65.4. The US also reported that the trade deficit contracted sharply to $59.1 billion in October from $78.3 billion, a result of Trump’s policies. Employment figures were pretty encouraging: the ADP Employment Change report showed that the private sector added 41K new jobs in December, slightly worse than the 47K anticipated but better than the November revised figure of -29K. Also, the Job Openings and Labor Turnover Survey (JOLTS) report showed that the number of job openings on the last business day of November stood at 7.146 million, down from the revised 7.449 million openings recorded in October. US-based employers announced 35,553 job cuts in December, down 50% from the 71,321 job cuts announced in November, according to the Challenger Job Cuts report. The report also indicated that December’s total is the lowest monthly total since 25,885 cuts were announced in July 2024. Finally, the US released the December Nonfarm Payrolls (NFP) report on Friday. The country added 50K new jobs in the month, missing the expected 60k, while the Unemployment Rate contracted to 4.4%, better than the 4.5% anticipated. The November headline was revised to 56K, down from the previously reported 64K. The news put the USD under near-term pressure, as the report was not as encouraging as previous releases suggested. Still, it also fell short of affecting the current Federal Reserve (Fed) approach to monetary policy. The Fed delivered a 25 basis points (bps) interest rate cut in December, as expected, and hinted at one more cut in 2026, short of what the market wants, but in line with policymakers’ cautious stance. Officials' main concern is the employment situation, and these figures align with such concerns. Market participants believe the Fed could deliver at least two interest rate cuts in 2026, as Chairman Jerome Powell's mandate is due to end in May. For sure, President Trump will replace him with someone aligned with his idea of more aggressive rate cuts. But it’s a wait-and-see there, with no action expected from the Fed in the first meeting of the year.

In the upcoming days, the focus will be on US inflation data. The country will publish the December Consumer Price Index (CPI) figures on Tuesday and the Producer Price Index (PPI) for October and November on Wednesday. November Retail Sales will be out on the same day. The potential impact on future Fed decisions will determine the US Dollar’s direction. Other than that, the focus will remain on geopolitical conflicts .

Source : https://www.fxstreet.com/analysis/eur-usd-weekly-forecast-the-world-gyrates-around-the-united-states-at-the-beginning-of-2026-202601091516

EUR/USD

GBP/USD

Can Pound Sterling withstand renewed US Dollar demand?

The Pound Sterling (GBP) witnessed a steep correction against the US Dollar (USD), sending GBP/USD down from four-month highs of 1.3568 to test the weekly low near 1.3400. An impressive USD recovery and simmering geopolitical tensions globally remained major headwinds to GBP/USD’s uptrend, fueling a notable retracement during the past week . Safe-haven demand for the Greenback surged at the start of the week as markets took into account the United States’ (US) military aggression in Venezuela and the capture of the former President Nicolas Maduro over the weekend. Markets remained concerned that the US-Venezuela conflict could extend into other countries such as Mexico and Colombia. The risk-off market environment weighed on the higher-yielding Pound Sterling, exerting additional downside pressure on the pair. The dovish Fed bets soon returned to the fore and smashed the USD alongside the US Treasury bond yields after the US ISM Manufacturing PMI declined to 47.9 in December, against the forecast of 48.3. However, the USD pullback was only temporary and seen as a profit-taking move heading into a fresh batch of US employment data releases midweek. Data released by the Bureau of Labor Statistics (BLS) on Wednesday showed that Job Openings, a measure of labor demand, dropped 303,000 to 7.146 million by the last day of November, against expectations of a 7.6M figure. The ADP report showed that private employment in the United States (US) increased by 41,000 jobs last month after a revised decrease of 29,000 in November. The market forecast was for a 47,000 growth. Further, the Institute for Supply Management’s index of services rose 1.8 points to 54.4, the highest since October 2024. The mixed US macro news kept the USD upside limited. Greenback buyers jumped back into the game in the second half of the week, as geopolitical tensions ramped up worldwide. Russia deployed submarine and other naval vessels to escort an aging oil tanker off the coast of Venezuela, according to the Wall Street Journal (WSJ). Meanwhile, the White House separately confirmed discussions about acquiring Greenland, including potential military involvement. China banned exports of dual-use items to Japan for potential military uses, citing national security concerns. Subsequently, the selling interest around the Pound Sterling intensified amid relentless USD demand, as GBP/USD hit its lowest level in the week near 1.3415. Another catalyst behind the USD’s rise on Thursday was the US recording its lowest trade deficit since 2009, which boosted Gross Domestic Product (GDP) growth forecasts. On Friday, GBP/USD entered a consolidation phase at around 1.3450 as the mixed employment data from the US failed to trigger a significant market reaction. The US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls rose by 50,000 in December, compared to the market expectation of 60,000. On a positive note, the Unemployment Rate edged lower to 4.4% from 4.6% in November. Following a week dominated by US employment numbers, the focus is now on the consumer inflation and sales data in the week ahead. Monday is devoid of any high-impact macro news, and hence, Tuesday’s US Consumer Price Index (CPI) report will be eagerly awaited for fresh hints on the Fed’s rate cut outlook, which will significantly affect the USD performance and the GBP/USD price action. On Wednesday, the US Retail Sales and Producer Price Index (PPI) data will be released, followed by the Existing Home Sales report. Thursday will feature the monthly British Gross Domestic Product (GDP) alongside the Industrial and Manufacturing Production data. Meanwhile, the weekly Unemployment Claims data will be watched from the US later that day. Finally, it’s a relatively quiet end to the week on Friday, with no top-tier economic data on the radar. Besides these statistics, the focus will also be on the geopolitical developments surrounding the US, Venezuela, and also between China and Japan. Any further geopolitical escalation could bode ill for the risk-sensitive Pound Sterling, while rendering positive for the safe-haven USD.

Source: https://www.fxstreet.com/analysis/gbp-usd-weekly-forecast-will-pound-sterling-extend-the-corrective-downside-202601091448

GBP/USD

USD/JPY

Drifts higher above 158.00 as Takaichi is considering calling a snap election.

The USD/JPY pair gains ground near 158.05 during the early Asian session on Monday. The Japanese Yen (JPY) weakens against the US Dollar (USD) following a report that Japan’s Prime Minister Sanae Takaichi is considering calling a snap election for parliament's lower house in the first half of February. Reuters reported on Sunday that Japan’s Prime Minister Sanae Takaichi may call an early general election, and it could be held as early as February. This would be the first time for the conservative Takaichi to face the voters, allowing her to capitalize on the strong public approval ratings she has enjoyed since taking office in October . Data released by the US Bureau of Labor Statistics (BLS) on Friday showed slower than expected US jobs growth, suggesting the US Federal Reserve (Fed) could hold interest rates steady later this month. Nonfarm Payrolls (NFP) in the US rose by 50,000 in December. This reading followed November's 56,000 (revised from 64,000) and came in weaker than the market expectation of 60,000. Meanwhile, the Unemployment Rate ticked lower to 4.4% in December from 4.6% in November, while the Average Hourly Earnings climbed to 3.8% YoY in December from 3.6% in the previous reading. Dovish Fed expectations could weigh on the Greenback against the JPY in the near term. Fed funds futures are pricing in nearly a 95% probability that the US central bank leaves interest rates unchanged at its next two-day meeting on January 27 and 28, up from 68% a month ago, the CME FedWatch tool showed.

Source: https://www.fxstreet.com/news/usd-jpy-drifts-higher-above-15800-as-takaichi-is-considering-calling-a-snap-election-202601112320

USD/JPY

Dow Jones

Stocks rally, dollar higher in wake of US jobs numbers.

Major stock indexes jumped to record highs and the dollar was also up on Friday after data showed the U.S. economy created fewer jobs than expected in December, which did little to change rate cut expectations from the Federal Reserve this year . The S&P 500, Dow and the STOXX 600 notched record high closes. Chip stocks rose and helped to boost the S&P 500, with Intel gaining 10.8% after U.S. President Donald Trump said he had a "great meeting" with the chipmaker’s Chief Executive Officer, Lip-Bu Tan. Broadcom rose 3.8%. The Bureau of Labor Statistics monthly report showed 50,000 workers were added to nonfarm payrolls in December, compared with expectations in a Reuters poll for a rise of 60,000, just above November’s downwardly revised increase of 56,000. The unemployment rate eased, as expected, to 4.4%. "Payrolls were a little bit light relative to consensus, but still fairly strong numbers," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "We are back to normal in terms of economic reporting, so that’s a bit of a relief for everyone." Before now, the release of U.S. economic data had been delayed because of the long federal government shutdown. Stock market gains this week came despite increased geopolitical tensions sparked by U.S. forces capturing Venezuelan leader Nicolas Maduro in a raid on its capital January 3 . The Dow Jones Industrial Average rose 237.96 points, or 0.48%, to 49,504.07, the S&P 500 rose 44.82 points, or 0.65%, to 6,966.28 and the Nasdaq Composite rose 191.33 points, or 0.82%, to 23,671.35. All three indexes posted gains in the first full trading week of 2026, driven by increases in materials, industrials and other sectors that have lagged technology stocks in recent years. MSCI’s gauge of stocks across the globe was up 5.42 points, or 0.53%, at 1,034.87, and hit a record intraday high. European shares ended at a record high. A jump in Glencore helped put the STOXX 600 on its longest weekly winning streak since May. The pan-European STOXX 600 index rose 0.97%. After the jobs report the dollar initially gave up almost all the day’s gains versus a basket of major currencies, having risen by nearly 0.2% earlier. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was last up 0.26% at 99.13. Interest rate sensitive two-year Treasury yields were higher after the data, while 10-year yields were last down slightly. The 2-year note yield, which typically moves in step with interest rate expectations for the Fed, rose 5 basis points to 3.538%, from 3.488% late on Thursday. The yield on benchmark U.S. 10-year notes fell 1.2 basis points to 4.171%. In commodities, crude oil ended sharply higher. Brent futures rose $1.35, or 2.18%, to settle at $63.34 per barrel, while U.S. West Texas Intermediate (WTI) crude gained $1.36, or 2.35%, to $59.12. Investors have become more convinced that production in Venezuela, even under U.S. control, may not rise meaningfully for some time. Copper prices rose, extending recent gains on renewed bets on a future demand boost, while aluminum hit its highest since April 2022. Investors had been bracing for a possible U.S. Supreme Court ruling on the legality of Trump’s tariffs. But the court is expected to issue its next rulings on Jan. 14. The court indicated on its website on Friday that it could release decisions in argued cases when the justices take the bench during a scheduled sitting next Wednesday.

Source : https://www.investing.com/news/stock-market-news/asian-stocks-ease-dollar-firms-ahead-of-jobs-report-ruling-on-tariffs-4438390

Dow Jones

Gold

Geopolitics, US inflation data to trigger next directional movement

After losing more than 4% in the last week of the year, Gold (XAU/USD) gathered bullish momentum as trading conditions normalized. Although XAU/USD entered a consolidation phase following the rally seen earlier in the week, it managed to register weekly gains. December inflation data from the US and geopolitics could drive Gold’s action in the short term. Gold registered heavy losses between the Christmas and New Year holidays. In the absence of fundamental drivers, profit-taking seemingly triggered this move, which was intensified by thin trading volumes . As market conditions started to normalize, XAU/USD gained traction and rose more than 2.5% on Monday. Additionally, escalating geopolitical tensions on news of the US military entering Venezuela and capturing Venezuelan President Nicolás Maduro and his wife over the weekend, allowed Gold to benefit from safe-haven flows. After extending its rally and gaining another 1% on Tuesday, the renewed US Dollar (USD) strength and the CME Group’s decision to hike the margins on Gold and Silver futures caused XAU/USD to lose its traction. Data published by the Automatic Data Processing (ADP) showed on Wednesday that US private-sector payrolls rose by 41,000 in December following the 29,000 decrease recorded in November. In another positive note, the Institute for Supply Management (ISM) reported that the Services Purchasing Managers’ Index (PMI) improved to 54.4 in December from 52.6 in November. Moreover, the Employment Index of the PMI survey rose into the expansion territory above 50 for the first time since June. With these data reassuring a Federal Reserve (Fed) policy hold in January, Gold edged lower midweek before going into a consolidation phase. In the meantime, China announced export controls on Silver (XAG/USD). With this development, Silver prices rose sharply to begin the week, gaining more than 10% in a two-day span. Reporting on the matter, “China ranks second in global silver mine production, but the Chinese dominate the silver market through their massive refining capacity. The country controls 60 to 70 percent of the world’s refined silver supply,” said Mike Maharrey, FXStreet contributor and market analyst at Money Metals Exchange. Although the CME’s margin hike caused XAG/USD to correct sharply, the Gold/Silver ratio, which represents the number of ounces of Silver required to purchase one ounce of Gold, fell nearly 4% for the week. At around 57, Gold/Silver ratio currently sits at its lowest level since August 2013. On Friday, the US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls rose by 50,000 in December, compared to the market expectation of 60,000. On a positive note, the Unemployment Rate edged lower to 4.4% from 4.6% in November. The market reaction to the employment data remained short-lived and Gold held in the upper half of its weekly range heading into the weekend. The economic calendar will be relatively light in terms of data releases. On Tuesday, the BLS will publish the Consumer Price Index (CPI) data for December. Retail Sales and Producer Price Index for November will also be featured in the US economic docket, which are likely to be largely ignored by market participants. December inflation data is unlikely to influence the Fed’s January decision in a significant way but a significant surprise, especially in the monthly core CPI print, could trigger a market reaction. A reading of 0.3%, or higher, could revive concerns over inflation remaining sticky and boost the USD in the immediate term. Conversely, a reading below 0.2% could have the opposite impact on the currency’s performance and help XAU/USD edge higher. Investors will keep a close eye on geopolitical headlines throughout the week. US Secretary of State Marco Rubio is planning to meet with officials from Denmark and Greenland. In an interview with the NY Times, US President Donald Trump reiterated his intentions of taking over Greenland. “Ownership is very important,” Trump told the newspaper. “Because that’s what I feel is psychologically needed for success. I think that ownership gives you a thing that you can’t do with, you’re talking about a lease or a treaty. Ownership gives you things and elements that you can’t get from just signing a document.” It is difficult to say what the next development will be in this matter but an escalation in tensions between the European Union and the US could cause investors to seek refuge. In this scenario, Gold could gather strength. The unrest in Iran led by anti-government demonstrations across the country, including in the capital city Tehran, could affect the risk mood in the near future as well.

US President Trump said that the US could take military action against Iran in case authorities use lethal force against protestors. In response, “America and Israel have tested their attack on Iran and this attack and strategy faced extreme failure,” said Iranian Foreign Minister Abbas Araghchi. “If they repeat it, they will face the same results,” he added and noted that they don’t desire a war but they are ready for it. A deepening conflict in Iran and an active involvement of the US could allow Gold to continue to benefit from safe-haven flows .

Source: https://www.fxstreet.com/analysis/gold-weekly-forecast-volatile-start-to-2026-as-markets-assess-us-data-geopolitics-202601091446

GOLD

Crude Oil

Gains as market weighs Iran, Russia supply risks; dealmaking for Venezuela in focus.

Oil prices rose 2% on Friday on growing supply worries linked to intensifying protests in oil-producing Iran and an escalation of attacks in Russia’s war in Ukraine. Brent futures settled $1.35, or 2.18%, higher to $63.34 per barrel, while U.S. West Texas Intermediate (WTI) crude was up $1.36, or 2.35%, to $59.12. Both benchmarks climbed more than 3% on Thursday, following two straight days of declines. For the week, Brent rose about 4%, while WTI gained about 3%. "The uprising in Iran is keeping the market on edge," said Phil Flynn, senior analyst with the Price Futures Group. Worries over potential disruption of Iran’s oil output grew as the civil unrest in the Middle Eastern country intensified. "Iran protests seem to be gathering momentum, leading the market to worry about disruptions," said Ole Hansen, head of commodity analysis at Saxo Bank. A nationwide internet blackout was reported in Iran on Thursday as protests over economic hardships continued in the capital Tehran, the major cities of Mashhad and Isfahan as well as other areas around the country. The Organization of the Petroleum Exporting Countries pumped 28.40 million barrels per day last month, down 100,000 bpd from November’s revised total, a survey showed, with Iran and Venezuela posting the largest declines. Concerns about the spread of the Russia-Ukraine war also added to supply worries. The Russian military said on Friday it had fired its hypersonic Oreshnik missile at targets in Ukraine. The targets included energy infrastructure supporting Ukraine’s military-industrial complex, the Russian defense ministry said in a statement . Still, global oil inventories are rising, and oversupply remains the main driver that could cap gains, Haitong Futures said. Unless risks around Iran escalate, the rebound is likely limited and hard to sustain . Meanwhile, the White House was set to meet with oil companies and trading houses Friday afternoon to discuss Venezuelan export deals. U.S. President Donald Trump has demanded that Venezuela give the U.S. full access to its oil sector following Washington’s capture of the country’s leader Nicolas Maduro on Saturday. Trump administration officials have said the U.S. will control Venezuelan oil sales and revenue indefinitely. Oil major  , global trading houses Vitol and Trafigura, and other firms are competing for U.S. government deals to market up to 50 million barrels of oil that state-run oil company PDVSA has accumulated in inventories amid a severe oil embargo. "The market will focus on the outcome in the coming days for how the Venezuelan oil in storage will be sold and delivered," said Tina Teng, market strategist at Moomoo ANZ.

U.S. oil and gas rig count, an early indicator of future output, fell by two to 544 this week, the lowest since mid-December, energy services firm Baker Hughes said in its closely followed report on Friday .

Source : https://www.investing.com/news/commodities-news/oil-rises-as-concerns-about-supply-disruptions-in-venezuela-iran-increase-4438380

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MAJOR DATA RELEASED DURING LAST WEEK

MAJOR DATA COMING OUT THIS WEEK (Time zone GMT+2)

Disclaimer

Moving Average Convergence/Divergence (MACD):

MACD uses different exponential moving averages to generate buy and sell indicators. The lower pane of the chart shows two lines: a Differential Line and a Signal Line. The Differential Line is the difference between a short and long-period exponential moving average, typically 12 and 26 periods. The Signal Line is typically a 9-period exponential moving average. When the DL crosses the SL from above, a sell indicator is generated, and when it crosses from below a buy signal is generated.

Relative Strength Index (RSI):

This is a momentum indicator that measures a security's price in relation to itself. The lower pane of the chart shows a line that fluctuates on a scale of 0 to 100. Typically buy signals are generated at 30 and sell signals are generated at 70. If the line breaks 30, the security is oversold, and a reversal is imminent. If the line breaks 70, it is overbought and is due for a downward correction.

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