Important DisclaimersFXEmpire is owned and operated by Empire Media Network LTD., Company Registration Number 514641786, registered at 7 Jabotinsky Road, Ramat Gan 5252007, Israel. The content provided on this website includes general news and publications, our personal analysis and opinions, and materials provided by third parties. This content is intended for educational and research purposes only. It does not constitute, and should not be interpreted as, a recommendation or advice to take any action, including making any investment or purchasing any product. Before making any financial decision, you should conduct your own due diligence, exercise your own discretion, and consult with competent advisors. The content on this website is not personally directed to you, and we do not take into account your individual financial situation or needs. The information contained on this website is not necessarily provided in real time, nor is it guaranteed to be accurate. Prices displayed may be provided by market makers and not by exchanges. Any trading or other financial decision you make is entirely your own responsibility, and you must not rely solely on any information provided through the website. FXEmpire does not provide any warranty regarding the accuracy, completeness, or reliability of any information contained on the website and shall bear no responsibility for any trading losses you may incur as a result of using such information. The website may include advertisements and other promotional content. FXEmpire may receive compensation from third parties in connection with such content. FXEmpire does not endorse, recommend, or assume responsibility for the use of any third-party services or websites. Empire Media Network LTD., its employees, officers, subsidiaries, and affiliates shall not be liable for any loss or damage resulting from your use of the website or reliance on the information provided herein.Risk DisclaimersThis website contains information about cryptocurrencies, contracts for difference (CFDs), and other financial instruments, as well as about brokers, exchanges, and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and involve a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money. FX Empire encourages you to conduct your own research before making any investment decision and to avoid investing in any financial instrument unless you fully understand how it works and the risks involved.

Created on January 05, 2026

• The British pound rallied a bit on Friday but cannot seem to hang onto gains against the USD.

GBP/USD

The British pound rallied a bit during the early hours on Friday to test the 1.35 level yet again. This is an area that has been important multiple times, and I think it is worth watching very closely.

The market is likely to continue to see a lot of noise in this general vicinity with the possibility of breaking out to the upside. Breaking out to the upside opens up a move to the 1.37 level.

A breakdown from here, breaking below the hammer from the Wednesday session, could open up a test of the 50-day EMA, possibly even the 200-day EMA underneath there. All things being equal, I think this is a market that is trying to find the momentum to break out, but it just can’t seem to get over this 1.35 level.

Market Outlook and Volatility

We will probably make a more profound statement sometime later next week, but in the meantime, I think you have got a lot of choppy short-term back-and-forth trading ahead. I don’t like the idea of getting too heavily involved in the market at the moment, mainly due to the fact that liquidity and volume are still issues, and of course, we don’t really have momentum to deal with.

By the end of next week, though, I do anticipate that we probably have a real shot at some type of movement. I do think that the end of next week, with the jobs numbers coming out of the United States, could give you a little bit of momentum in this pair.

Between now and then, we are probably going to be very jittery and choppy, and with that, I look to short-term charts more as a range-bound trader as it continues to offer short-term opportunities, perhaps on something like the 15.

Ready to trade our daily GBP/USD Forex forecast? Here’s some of the best forex broker UK reviews to check out.

Created on January 05, 2026

The US dollar initially jumped against the yen on Friday, but it is worth noting that the markets are still paying you to hold this pair to the long side.

USD/JPY

The US dollar initially did rally a bit during the trading session here on Friday, but we have given some of that back. It isn’t a huge surprise, nor do I think it really matters because, quite frankly, Friday is essentially a throwaway day as most traders won’t even be bothered trading until Monday at the earliest.

That being said, we are in the middle of consolidation, so the fact that we went up early and then turned around later in the same session really doesn’t surprise me. This is a market that continues to see the 158 yen level above offer resistance while 155 yen starts the floor. We have the 50-day EMA sitting right there as well, but I think the floor is a little thick here and therefore short-term dips almost certainly offer opportunities.

Market Sentiment and Outlook

If we can break above 158 yen, and I do expect that to happen eventually, we go looking to the 160 yen level. On a breakdown below the 50-day EMA, then the 153 yen level could be targeted for support.

I do expect to see a lot of choppy and erratic behavior, but over the longer term, this is a market that I think continues to be bullish mainly due to the fact that the Bank of Japan cannot tighten monetary policy seriously, and you will continue to get paid to hold onto this pair to the long side at the end of every session.

Granted, that interest rate differential might shrink a bit, and it takes away some of the momentum, but as things stand right now, I don’t see any reason to get short, at least not unless there’s some type of external shock that really throws a monkey wrench into risk appetite.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

Created on January 05, 2026

The EUR/USD pair ended the week in the red last week as many investors remained in a holiday mood. It was trading at 1.1720, down slightly from last year’s high of 1.1910 ahead of key events this week.

US Non-Farm Payrolls Data

The EUR/USD exchange rate will likely be volatile this week as investors react to the upcoming US Non-Farm Payrolls (NFP) data, which are scheduled on Friday.

The report is expected to show that the American economy added over 55k jobs in December after adding 64k in the previous month. Most notably, the report is expected to show that manufacturing jobs continued falling, mostly because of Donald Trump’s tariffs.

Economists expect the upcoming report to show that the unemployment rate dropped to 4.5% in December from the previous 4.6%. The unemployment rate has jumped in the past few months because of Donald Trump’s policy to purge thousands of government workers.

The upcoming jobs report comes a week after the Federal Reserve published minutes of the last monetary policy meeting. These minutes showed that most officials hinted that they were supportive of interest rate cuts if the country’s inflation continues falling.

The EUR/USD pair will also react mildly to the weekend events in which Donald Trump invaded Venezuela, took its leader, and charged him in a New York court. While Venezuela has vast oil resources, the amount of oil it ships to other countries is relatively lower than other countries.

The other major catalysts for the EUR/USD pair will be the upcoming macro data from Europe and the United States. For example, the ISM will publish the latest manufacturing PMI numbers, which will provide more data on the state of the sector.

Also, Eurostat will release the latest consumer price index (CPI) data on Wednesday, which will provide more information about the state of inflation and hints on what to expect from the European Central Bank.

EUR/USD Technical Analysis

The weekly chart shows that the EUR/USD pair has remained in a tight range in the past few weeks. It was trading at 1.1720 on Friday, down slightly from last month’s high of 1.1806.

The pair has remained slightly above the 50-week and 25-week Exponential Moving Averages (EMA), a sign that the bullish trend will continue. It has also remained above the Supertrend indicator.

However, a closer look shows that it has formed a double-top pattern at 1.1800 and a neckline at 1.1466. It also remains at the ultimate resistance level of the Murrey Math Lines tool.

Therefore, there is a likelihood that the pair will retreat this week as investors price in geopolitical risks. If this happens, it may drop to the key support level at 1.1600. A move above the resistance at 1.1800 will invalidate the bearish outlook.

Ready to trade our Weekly Forex forecast? Check out our list of the best Forex brokers in the world.