Market Sector Scanner: Yen Weakness Persists as U.S. Data Drives Markets and Volatility Builds

Markets focused on falling unemployment rather than weak job growth, lifting the U.S. dollar and pushing U.S. equities to record highs, while expectations shifted toward an April rate cut. Gold remained firm amid rising geopolitical risks, and the EU unemployment rate beat expectations. In Japan, markets stayed cautious on speculation of a snap election and concerns over rising 10-year government bond yields.

Scan for opportunities on:

• Forex market (major currency pairs)
• Equities
• Commodities (gold)

Key Events Calendar for January 12 – January 16

Forex Market

USD/JPY

Last Week Recap
USD/JPY rose sharply following strong U.S. employment data, pushing the pair back toward the key 158 level. Ongoing concerns about Japan’s government debt continued to weigh on the yen, while there were still no clear signs of intervention from the Bank of Japan.

Technical Picture
Price has tested key resistance near recent highs around 158 and the upper Bollinger Band. Despite this, the broader trend remains strong, with the 10-day moving average turning higher again. A clearer sell signal would only emerge if price moves back below the upper Bollinger Band.

Outlook This Week
The uptrend remains intact, and the market is likely to continue testing higher levels. Buying pullbacks looks like the preferred strategy rather than fighting the trend. Key U.S. economic data this week is expected to add volatility.

GBP/JPY

Last Week Recap
GBP/JPY spent the week consolidating recent gains, with ongoing yen weakness keeping the broader uptrend intact. U.S. employment data helped push the pair toward the highs of the week, reinforcing bullish sentiment.

Technical Picture
The uptrend has slowed, with the 10-day moving average flattening and price trading around the middle of the Bollinger Bands. This suggests a period of consolidation rather than a reversal.

Outlook This Week
The bias remains bullish, as intervention to curb yen weakness appears unlikely unless the yen weakens further. With momentum easing, buying pullbacks looks more favorable than chasing prices higher.

EUR/USD

Last Week Recap
EUR/USD moved lower last week as renewed strength in the U.S. dollar reversed part of last year’s losses. Improved confidence in the U.S. economy, driven by a larger-than-expected drop in the unemployment rate, weighed on the euro and pushed the pair to close near weekly lows.

Technical Picture
The short-term trend has turned lower, with price trading below the 10-day moving average, which is now pointing down. However, with the pair sitting near the lower Bollinger Band, downside momentum may pause, raising the risk of short-term consolidation.

Outlook This Week
The overall bias remains bearish, but the market looks oversold. It may be better to wait for a pullback toward the 10-day moving average before looking to sell. 

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Equities

U.S. Stock Market

Last Week Recap
The Nasdaq edged higher last week as the market remained supportive of risk-taking, helped by a lack of negative news in the short term. However, gains were limited as concerns continued around high valuations, particularly in AI-related stocks.

Technical Picture
The 10-day moving average remains close to flat, while the Bollinger Bands continue to point sideways. This suggests the market is still lacking momentum and remains in a consolidation phase until a new catalyst emerges.

Outlook
Upcoming U.S. inflation and retail sales data could provide clearer direction as markets look ahead to the timing of the next U.S. interest rate cut and the sustainability of the longer-term uptrend. In the near term, range-trading strategies continue to look most appropriate.

Commodities

Gold

Last Week Recap
Gold continued its strong uptrend as geopolitical risks increased following developments in Venezuela and Greenland, alongside a more aggressive stance from the U.S. government on the global political stage.

Technical Picture
The uptrend looks likely to continue, with the 10-day moving average pointing higher as prices return to record highs. While gold is trading close to the upper Bollinger Band, strong buying interest suggests this may slow the pace of gains rather than signal a reversal.

Outlook This Week
The uptrend shows no clear signs of ending. The focus remains on trading with the trend rather than selling into strength. Short-term traders may look to buy momentum, while medium-term traders may prefer to wait for pullbacks toward the 10-day moving average.

With markets fully back from the holidays, volatility is likely to pick up as traders position for the year ahead and react to U.S. data and rate-cut expectations. The yen and gold are near key levels, with U.S. inflation and retail sales in focus and the Bank of Japan watched closely for any response to further yen weakness.