What I'm Observing on January 14, 2026
Macro Indicators and Yield Trends
There's a palpable sense of unease among European and Asian markets regarding the United States. However, once trading begins in New York, these concerns seem to dissipate quickly. This behavior suggests that many Americans recognize the ongoing political drama plays a significant role in market movements. Consequently, I advise against overanalyzing these short-term fluctuations; they serve more to illustrate current session dynamics rather than long-term trends.
During today's trading session, two critical announcements are on deck: the Producer Price Index (PPI) and retail sales data. While it’s unlikely these reports will significantly sway the market unless there's a substantial miss, it's worth noting that the Consumer Price Index (CPI) had a slight miss in the last session. Therefore, the market appears to have already adjusted itself accordingly.
USD/JPY
The first currency pair I’m focusing on is the US dollar compared to the Japanese yen. The current scenario makes sense; as US yields decline, this negatively impacts carry trades, leading us down to test the 158 yen level. I view this as a solid support zone, and I generally would not recommend shorting this pair right now.
The Bank of Japan remains locked into a very low interest rate environment. Even if there are attempts to normalize rates, it could lead to unforeseen consequences due to Japan's substantial debt levels. Notably, the 162 yen mark was a significant swing high, coinciding with major market interventions, making it a point of interest for traders. While the Bank of Japan does not have an explicit threshold for intervention, the market tends to remember such levels. Personally, I favor buying during dips, especially down to around the 156 yen mark.
NZD/USD
An interesting outlier in today’s session is the New Zealand dollar. It has been struggling against the US dollar following comments from Governor Braman about a high likelihood of another rate cut. This led to a drop below the crucial 0.58 support level a few days ago. Currently, we find ourselves in a waiting game regarding how this potential rate cut may impact the Kiwi dollar. My outlook remains bearish for this currency pair.
As we analyze recent price action, we see a bounce that tested the 50% Fibonacci retracement level followed by a test of the 38.2% level, before declining further. I believe this scenario, alongside the situation with the Japanese yen, presents an opportunity for the US dollar to perform well. Right now, I do not subscribe to the narrative suggesting the US dollar is exceptionally weak.
Gold (GC11)
In the current trading landscape, it’s nearly impossible to ignore the precious metals market, particularly gold. Presently, gold appears poised to reach new heights, driven both by legal challenges faced by Federal Reserve Chairman Jerome Powell and escalating geopolitical risks. At this juncture, any factor that could be perceived as favorable for gold is likely to propel its price higher; we're simply looking for catalysts.
Considering the formation of an ascending triangle pattern, the market could potentially approach the $4,900 mark in the coming months. I believe there’s a strong possibility that we may even see attempts to reach $5,000 soon. For now, I set the floor around $4,400. Any short-term pullbacks should be viewed as buying opportunities, and I am particularly eyeing the $4,600 level as a near-term support. Should prices approach this area and show signs of a rebound, I would be eager to buy into the market.
Crude Oil (CL11)
The crude oil market has demonstrated bullish behavior recently, largely attributable to developments concerning Venezuela and Iran, along with the potential impact of 25% tariffs on nations engaging with Iran. Nonetheless, one should recognize that despite these tariffs, countries like Russia and Iran have continued to find buyers for their oil despite longstanding sanctions. For instance, Europe occasionally imports Russian and Iranian oil through intermediaries like India and China.
I find much of this rally to be unfounded. While it could gain momentum if military action occurs in Iran, I suspect that ultimately, we will reach a point of exhaustion and see selling resume due to inadequate demand. I am closely monitoring the 200-day exponential moving average (EMA) and the $62 price point, looking for signs that suggest the market is running out of steam. If we breach above the 200-day EMA, we could possibly rise to $65, although external factors may change the landscape. However, overall, I contend that there remains an oversupply of oil, and much of the current market movement seems driven by drama rather than underlying economic realities.
