The net positions of GBP in the UK increased from £-30.5K to £-25.3K. This shows a shift in how the market views the British pound.

The Euro and US Dollar Pair

The EUR/USD pair is moving down towards the 1.1600 support level. This decline is driven by a strong US dollar, following comments about future leadership at the Federal Reserve. At the same time, gold prices have dropped below $4,600 due to easing geopolitical tensions and a stronger US dollar. Bitcoin remains above $95,000, even with a decrease in retail demand. Ethereum is trading within its EMA support and resistance bands, while XRP is on its third day of decline. Next week, we will see key events like US PCE data and talks at Davos that could impact the dollar’s outlook. The Bank of Japan is expected to keep its current policy, while the UK’s CPI and retail sales data may influence expectations for the BoE.

Market Movements and Predictions

Despite some challenges, Dash’s price has hit an intraday high of $96.85. This rise is backed by growing retail interest and a notable increase in futures Open Interest, now at $165 million. We observed net shorts on the Pound Sterling decrease back in 2025, which was an early indicator. Now, speculative positions have turned positive for the first time in over a year, showing a net long of £5.1K. This suggests traders might see continued upward momentum for GBP, especially since UK inflation is still higher than in other G7 nations. Last year, the strong narrative of a resilient US economy delayed cuts from the Federal Reserve, keeping the dollar strong. However, with December’s Core PCE reading cooling to 2.8%, the market is starting to anticipate a more relaxed approach. The CME FedWatch Tool indicates a strong chance of a rate cut by March, which could create headwinds for the dollar that were absent for most of 2025. This shift makes call options on assets that struggled against the dollar last year more appealing. Gold’s drop below $4,600 resulted from that strong dollar, but as we enter 2026, the situation is changing. A weaker dollar and the prospect of lower interest rates tend to support gold, making it a buy on dips. Concerns about Japanese intervention at the 158.00 level for USD/JPY last year remain important. Japanese officials have become more vocal this month as the yen weakens past 161.00. This poses significant risks for those holding long dollar positions against the yen, as the chance of sudden, sharp moves is rising. Create your live VT Markets account and start trading now.

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