Market Sector Scanner: Year-End Quiet Leaves Yen Weakness in Focus as Traders Position for January Data
Markets drifted into year-end as holiday trading thinned and data was limited. The Fed minutes brought no surprises, the yen stayed weak with no sign of intervention, and gold trimmed recent gains. Focus now shifts to key January data, led by U.S. jobs.
Markets were quiet into the year-end as holidays reduced activity and economic data was limited. The Fed’s December meeting minutes brought no surprises, with future rate cuts still dependent on inflation and growth and only a small chance of a January cut. Gold fell early in the week, trimming recent gains, while the yen continued to weaken with no signs of intervention.
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Key Events Calendar for January 5 – January 9
Forex Market
USD/JPY
Last Week Recap
Ongoing concerns about Japan’s government debt situation saw USD/JPY resume its uptrend, ending the year near recent highs. Despite the continued weakness of the yen, most traders still view direct intervention by Japanese authorities as a low-probability outcome, allowing the pair to remain well supported.
Technical Picture
The 10-day moving average has turned higher again, and price remains below the upper Bollinger Band, leaving room for further gains. This technical setup suggests upside momentum remains intact, with a retest of the 158 resistance level possible.
Outlook This Week
As long as USD/JPY holds above the 10-day moving average, the bias remains toward higher levels. A move back toward 158 is likely, as the market continues to test the resolve of Japanese authorities and assess the likelihood of any intervention.
GBP/JPY
Last Week Recap
GBP/JPY traded sideways into year-end, consolidating its recent strong gains. Concerns over possible Bank of Japan intervention to curb yen weakness failed to materialize, allowing the pair to hold elevated levels.
Technical Picture
The broader uptrend remains intact, with the upward-sloping 10-day moving average providing reliable support. Price remains well below the upper Bollinger Band, suggesting the market is not overstretched and that further upside remains possible.
Outlook This Week
The bias remains bullish. As long as price holds above the 10-day moving average, the focus should remain on buying opportunities. A break above recent highs would reinforce the continuation of the uptrend.
EUR/USD
Last Week Recap
EUR/USD moved lower last week after failing once again near the 1.1800 resistance level. Profit-taking by traders picked up, and with year-end trading conditions remaining quiet, the selling pressure was driven more by positioning than by new economic news.
Technical Picture
The pair closed below the 10-day moving average, which has now started to flatten. This signals that the previous uptrend has stalled. Price has also moved back toward the middle of the Bollinger Bands, suggesting the market is no longer trending strongly in either direction.
Outlook This Week
Sideways to slightly lower price action looks most likely in the near term. Traders are likely to remain cautious ahead of Friday’s U.S. employment data, which could provide the next clear signal for direction.
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Equities
U.S. Stock Market
Last Week Recap
The Nasdaq moved lower into year-end as traders took profits following the strong gains seen in 2025. Ongoing concerns about high valuations, particularly among AI-related stocks, also weighed on sentiment during the final trading sessions of the year.
Technical Picture
Price has moved back below the flat 10-day moving average, reinforcing the view that the market is currently in a range-trading phase. The Bollinger Bands also point to subdued momentum, supporting the expectation of sideways price action in the near term.
Outlook
As markets transition into the new year, traders will be looking for clues on whether the uptrend from the past few years can continue. However, it may take time for a clear direction to emerge, making range-trading strategies more suitable in the short term.
Commodities
Gold
Last Week Recap
Gold fell sharply in thin, year-end trading as traders rushed to take profits after the strong gains seen in recent weeks. The lack of liquidity exaggerated the move, even though the broader demand picture remains supportive.
Technical Picture
Prices have moved back below the 10-day moving average, suggesting the recent strong uptrend may be pausing in the short term. Gold has also returned toward the middle of the Bollinger Bands, pointing to a period of consolidation rather than a clear reversal.
Outlook This Week
Despite the recent pullback, underlying demand for gold remains strong, supported by ongoing geopolitical risks following recent events in Venezuela. The focus remains on buying opportunities as markets move into the new year, rather than selling into short-term weakness.
Markets may start quietly as traders return from the holidays and position for 2026. Friday’s U.S. employment report is the key event, with attention on whether equity and gold strength, and U.S. dollar weakness, continue into the new year.
