Market Sector Scanner: Gold Resumes Its Rise as Yen Weakness Returns
Gold rebounded toward $5,000 after early selling, yen weakness lifted USD/JPY, and equities showed mixed performance as the Dow hit new highs. With U.S. retail sales and employment data ahead, markets remain volatile amid renewed intervention risks in Japan.
Markets saw a strong week as the Nikkei 225 surged after Sanae Takaichi secured a majority, while the Dow moved above 50,000. Gold recovered toward $5,000 after early selling, but Bitcoin fell as speculators continued to exit. With limited data releases, focus remained on better-than-expected U.S. manufacturing data, delayed U.S. employment figures, and central banks, as the BoE and ECB kept rates unchanged.
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Key Events Calendar for February 9 – February 13
Forex Market
USD/JPY
Last Week Recap
Yen weakness returned last week ahead of expectations that Sanae Takaichi would secure a win in the weekend elections. Recent comments from Takaichi, indicating she is not overly concerned about yen weakness and supports further government borrowing, encouraged renewed yen selling and pushed USD/JPY higher.
Technical Picture
The strong rally last week lifted prices back above the 10-day moving average and the upper Bollinger Band. While this reflects improved momentum, a move back below the upper Bollinger Band could generate a short-term sell signal.
Outlook This Week
With the market trading close to recent highs, the risk of yen-buying intervention by the Bank of Japan is likely to limit further upside. As a result, range trading looks to be the most favorable strategy for USD/JPY this week.
GBP/JPY
Last Week Recap
GBP/JPY resumed its uptrend last week, testing yearly highs amid renewed yen weakness and better-than-expected UK manufacturing data. The Bank of England kept interest rates unchanged as expected, but a larger-than-anticipated number of members voting for a rate cut briefly pressured GBP/JPY. However, the pair recovered and ended the week strongly ahead of the Japanese election.
Technical Picture
Bollinger Bands remain relatively narrow and acted as resistance last week, while the 10-day moving average continues to move sideways. This suggests consolidation, with the market awaiting a catalyst to push prices toward new yearly highs.
Outlook This Week
The outlook remains positive despite ongoing risks of yen-buying intervention. This week’s U.S. employment data is likely to be a key driver in determining the next major move. For now, range trading with a bullish bias remains the preferred strategy.
EUR/USD
Last Week Recap
EUR/USD had a relatively quiet week, with the pair continuing to probe lower levels. Eurozone inflation data came in slightly below expectations, while the European Central Bank kept interest rates unchanged, contributing to a lack of clear directional momentum.
Technical Picture
EUR/USD has moved back below the 10-day moving average, signaling the end of the recent short-term uptrend. Price action now points to sideways consolidation, with the pair trading near the middle of the Bollinger Bands.
Outlook This Week
This week’s direction for EUR/USD will largely depend on upcoming U.S. retail sales and employment data, as the market looks for a clearer catalyst to establish the next move.
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Equities
U.S. Stock Market
Last Week Recap
Concerns about the impact of AI replacing software companies weighed on the Nasdaq last week, despite the Dow Jones index rising to new record highs.
Technical Picture
The lower Bollinger Band acted as support and triggered a buy signal toward the end of the week. However, with the 10-day moving average now pointing lower, any rebound may be limited.
Outlook This Week
A short-term downtrend is beginning to form, suggesting that selling into strength may be the preferred strategy. Ongoing concerns around AI disruption are likely to continue influencing sentiment in the near term.
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Commodities
Gold
Last Week Recap
Gold started the week under pressure as panic selling continued. Once markets stabilized, strong buying returned, supported by ongoing geopolitical risks and government finance concerns. This recovery helped gold finish the week higher.
Technical Picture
Prices pulled back toward the 10-day moving average, signaling the end of the overbought conditions. Gold is now trading near the middle of the Bollinger Bands, with the $5,000 level acting as key resistance and limiting further upside.
Outlook This Week
The market may require another week of consolidation. However, buying interest remains strong, suggesting that buying on weakness is likely to be the preferred strategy in the week ahead.
Gold will look to keep recovering, while Bitcoin hopes the recent selling is over. Markets will also be watching U.S. retail sales and employment data for direction. In Japan, yen weakness after Takaichi’s victory could bring talk of intervention back into focus.
