Market Sector Scanner: Gold Hits New Records as USD/JPY Erases Recent Gains
Gold surged to new record highs last week on a weaker U.S. dollar, while USD/JPY erased recent gains after Bank of Japan comments on future rate hikes. With year-end holidays reducing liquidity and limited data ahead, markets are likely to remain calm, though sudden moves are still possible.
Gold hit record highs during a quiet, holiday-shortened week as a weaker U.S. dollar supported the ongoing uptrend. USD/JPY moved lower after Bank of Japan Governor Ueda signaled readiness for further rate hikes next year, with additional yen support coming from rising Japanese bond yields, which climbed to 2.04%. In the U.S., GDP was revised higher to 4.3%, while consumer confidence fell again, highlighting growing concerns about jobs and economic conditions.
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Key Events Calendar for December 29 – January 2
Forex Market
USD/JPY
Last Week Recap
USD/JPY reversed from recent gains after Bank of Japan Governor Ueda said that interest rate hikes are likely to continue into 2026. Comments from Japan’s finance minister expressing concern over the weak yen also added pressure, prompting a pullback from recent highs.
Technical Picture
Resistance near the yearly highs and the upper Bollinger Band held, sent prices back toward the 10-day moving average. The moving average is now flat, pointing to range-bound trading conditions rather than a strong trend.
Outlook This Week
With resistance confirmed around 158, price action is likely to stay sideways to lower in the near term, with a move toward 155 possible if selling pressure continues.
GBP/JPY
Last Week Recap
GBP/JPY held on to recent gains as GBP/USD strengthened on U.S. dollar weakness in quiet trading conditions ahead of the Christmas holidays.
Technical Picture
Price briefly stretched above the upper Bollinger Band last week, triggering a short-term sell signal, but the broader uptrend remains intact. The rising 10-day moving average continues to provide strong support.
Outlook This Week
The uptrend is likely to continue, making selling opportunities less attractive. The preferred strategy remains to wait for pullbacks toward the 10-day moving average to look for buying opportunities.
EUR/USD
Last Week Recap
EUR/USD moved modestly higher last week as broad U.S. dollar selling continued in thin, year-end trading conditions. With markets winding down for the holidays and economic data limited, flows were driven more by positioning than strong conviction.
Technical Picture
The upper Bollinger Band and the 1.1800 area continue to act as resistance. The 10-day moving average is starting to flatten, suggesting the recent uptrend is losing momentum.
Outlook This Week
A break below the 10-day moving average would be a short-term sell signal. With traders watching a potential double-top near 1.1800, selling on weakness remains the preferred strategy.
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Equities
U.S. Stock Market
Last Week Recap
In a quiet, holiday-shortened week, the Nasdaq edged slightly higher as many investors and traders stepped back from active trading ahead of year-end.
Technical Picture
Prices are holding near the middle of the Bollinger Bands and around the downward-sloping 10-day moving average, pointing to subdued momentum and short-term range-bound trading conditions.
Outlook
With another shortened week ahead due to year-end holidays and no major economic or earnings announcements scheduled, market focus is likely to remain on positioning for 2026 rather than strong directional moves.
Commodities
Gold
Last Week Recap
Gold surged to fresh record highs last week, driven by strong year-end demand and a weaker U.S. dollar, which together sparked renewed buying interest.
Technical Picture
Prices continue to trade above the upper Bollinger Band, reflecting strong momentum. The rising 10-day moving average confirms that the broader uptrend remains firmly in place, with no clear signs of exhaustion in the short term.
Outlook This Week
With gold at record highs, there are no clear resistance levels overhead. The preferred strategy remains to wait for pullbacks toward the 10-day moving average to look for buying opportunities, rather than attempting to sell into the strength.
Limited market moves are expected this week as global markets wind down for the year and trading activity remains thin. With holidays reducing participation and economic releases light, volatility should stay low, though unexpected moves are still possible in thin market conditions.
