Foreign investment in Japanese stocks dropped from ¥1,141.4 billion to ¥874 billion by January 16, recent data shows. This comes as financial markets remain unstable and global economic concerns continue. The GBP/USD currency pair rose to about 1.3435 in the early European session, following stronger UK inflation reports. Meanwhile, gold prices have fallen in Saudi Arabia, the Philippines, and the UAE, according to FXStreet.

Australian Dollar Gains

The Australian dollar has strengthened due to positive job data, holding a solid position against the US dollar. In contrast, EUR/USD is down, falling below 1.1700, partly because of weaker forecasts and economic data. FXStreet provides a range of resources for forex trading, including guides on choosing the best brokers for different needs, such as those with low spreads, high leverage, and specific platforms like MT4. FXStreet advises traders to do their own research before making investment choices. They highlight risks in open markets and the importance of informed trading. They also offer disclaimers about the accuracy and timing of their information. With the British Pound climbing above 1.3400, the focus is on its upward trend. This increase was sparked by a surprising inflation report for December 2025, showing a year-over-year rate of 3.8%, which surpassed expectations of 3.5%. Traders might consider call options on GBP/USD as strong performance could test the 1.3500 resistance level, especially if upcoming US data shows weakness.

Gold Reversal

Gold prices have sharply dropped below $4,800 an ounce as tensions between the US and Europe ease. Gold rallied over 30% in 2025, serving as a key hedge against geopolitical risks, similar to patterns seen during the 2019 trade disputes. This pullback suggests that traders who believe in this easing should consider buying puts or short futures, targeting the $4,750 support level. The Australian Dollar is gaining strength following a positive jobs report for December 2025, with the unemployment rate down to 3.7%. This good news lowers the chances of the Reserve Bank of Australia cutting interest rates soon, making long AUD/USD positions appealing. Derivatives traders may look for strategies that capitalize on the Aussie dollar’s strength against a stable US dollar. In contrast, the Euro is struggling after falling below the key 1.1700 mark against the dollar. This weakness is worsened by recent weak manufacturing data from Germany and a dovish stance from the European Central Bank. Additionally, reduced foreign investment in Japanese stocks could put pressure on the Yen due to the ongoing interest rate gap with the US. Attention is now on the upcoming US Personal Consumption Expenditures (PCE) and GDP data, which will be crucial in determining the US Dollar’s direction for the next few weeks. Given the uncertainty, traders might use options strategies like straddles on major pairs to take advantage of expected volatility without betting on a specific direction. Create your live VT Markets account and start trading now.

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