Technical Outlook on GOLD, USD/JPY, EUR/USD

Geopolitical uncertainty --> GOLD

Gold continues to shine, decisively breaking above the psychological 5,000 level as investors seek protection amid rising geopolitical and political uncertainty. Trilateral talks between Russia, Ukraine, and the U.S. over the weekend were described as constructive, yet their outcome remains unclear. At the same time, tensions between the U.S. and Canada escalated following President Trump’s warning of 100% tariffs should Canada deepen trade ties with China.

Additional support for safe-haven flows stems from strained U.S. relations with the EU and Iran, the proposal of a new peace board that could challenge the role of the United Nations, and renewed concerns over a possible U.S. government shutdown following the latest shootings in Minneapolis. Meanwhile, Japan’s request for U.S. cooperation to stabilize the yen has added to market unease, increasing the odds of a persisting dollar shorting.

Looking for resistance levels, the precious metal could surge above the 5,180 barrier and towards the 5,430 region, unless the Fed pushes back against pressure for lower borrowing costs. On the downside, sellers will be watching the 5,000 handle closely. However, a deeper correction is unlikely to scare traders unless the price slumps below the 20-day SMA near 4,600.

Fed rate decision --> USD/JPY

USD/JPY plunged to a two-month low of 153.79 on Monday after U.S. rate checks were interpreted as a sign of possible U.S.–Japan coordination on foreign exchange intervention. Adding to downside pressures were comments from Japanese Prime Minister Takaichi, who reinforced expectations that authorities are prepared to act against excessive yen weakness ahead of the February 8 snap election.

Attention now turns to Wednesday’s FOMC decision. Markets widely expect the Fed to keep rates unchanged at 3.5%–3.75%, with inflation still above target and unemployment near historic lows. As policymakers will not update their economic projections, the meeting may prove uneventful unless officials hint at growing pressure to ease policy. Traders are also monitoring speculation surrounding Trump’s potential pick for the next Fed chair.

Technically, USD/JPY is currently hanging around a make-or-break point of 154.35 after its sharp drop below its SMAs. A sustained break below this level could trigger a move towards 153.00 and potentially 151.50.

Eurozone flash GDP growth --> EUR/USD 

EUR/USD extended its rally as the U.S. dollar weakened, nearly touching 1.1900 after a decisive reversal above its SMAs renewed optimism of a bullish continuation. The euro may be drawing fresh demand as its major peers, and particularly the dollar and the yen, face stronger political and economic headwinds.

Friday’s preliminary Eurozone Q4 GDP data will be crucial in assessing the resilience of the region’s recovery. Forecasts suggest growth may ease to 1.2% y/y from 1.4%, with quarterly expansion slowing to 0.2% from 0.3% before.

If dollar weakness persists and Eurozone data confirms stable growth, EUR/USD could target the 1.1960–1.1970 resistance zone before challenging the 1.2000 psychological level, last seen in mid-2021. US-EU trade tensions will be under the spotlight too after President Trump threatened 10% tariffs on EU products, effective February 1.