Japan’s CFTC JPY net positions have dropped sharply to ¥8.8k from ¥141k. This significant decline impacts currency trading. The EUR/USD closed the week around 1.1640, down 0.7%, as the US Dollar remains strong. Likewise, GBP/USD fell below 1.3400, testing the 200-day SMA due to the robust performance of the US Dollar.

Gold And Cryptocurrencies

Gold continues to rise, reaching a yearly high of about $4,500 per troy ounce, despite the US Dollar’s strength and higher Treasury yields. However, cryptocurrencies like Bitcoin, Ethereum, and XRP are experiencing increased market fear, leading to unstable prices. Future market behavior could be shaped by upcoming US CPI data and geopolitical events. XRP is suffering from low retail demand, facing challenges even after a promising start to 2026. For traders, FXStreet offers insights on the best brokers for 2026, highlighting top options for various currencies and markets. It emphasizes the importance of thorough research before any investments due to the risks involved. The steep decline in net long Japanese Yen positions, from ¥141K to just ¥8.8K, indicates a significant retreat by bulls. This serves as a strong signal to consider shorting the yen, potentially through put options on JPY futures or by shorting JPY crosses. Recent remarks from the Bank of Japan in late 2025 continue to support its accommodating policy, contrasting sharply with the Federal Reserve’s analytical approach.

Trading Thematic Trends

The dominance of the US Dollar is a key theme, prompting us to trade in this direction. Despite a mixed December 2025 jobs report, with hiring at 165,000 against an expected 180,000, the market is honing in on ongoing wage pressures. Buying call options on the U.S. Dollar Index (DXY) or puts on EUR/USD aiming for the 1.1600 level is a solid strategy before next week’s US CPI data. Gold’s surge past $4,500, in light of a strong dollar, suggests deep underlying fear in the market. Such behavior isn’t typical and indicates that traders are hedging against geopolitical uncertainties, like the Supreme Court’s upcoming tariff ruling. The high VIX, staying above 18 for the last two weeks, confirms this risk-aversion sentiment, making long positions in gold futures or call options appealing. In the cryptocurrency arena, the weakness is likely to persist as institutional interest fades. Recent on-chain data reveals a net outflow of over $600 million from spot Bitcoin ETFs in the first week of 2026, the highest since Q3 2025. This trend supports positioning for further price drops through protective puts or shorting futures, particularly as Bitcoin struggles to stay above its 50-day EMA. Create your live VT Markets account and start trading now.

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