Article Rewrite: “Pairs in Focus: 4th to 9th January 2026”
Written by: Mahmoud Abdallah
Source: DailyForex.com
The FX market enters the first full trading week of 2026 with a mix of optimism and caution. Following a relatively quiet start to the year, traders are preparing for key data releases and central bank statements that will shape the direction of major currency pairs. With market volatility expected to increase, particular attention is being paid to the performance of the US dollar, euro, Japanese yen, British pound, and commodity currencies like the Australian and New Zealand dollars.
The following analysis focuses on several currency pairs that are expected to experience notable movements in the trading week from January 4 to January 9, 2026. A technical and fundamental breakdown of these pairs gives traders insight into possible market behavior in the days ahead.
EUR/USD: The Euro Struggles with Mixed Economic Signals
The EUR/USD pair enters the week unable to break through the 1.1050 resistance level. Economic data from both regions have been mixed. The euro continues to face headwinds from a cautious European Central Bank (ECB) and lagging economic recovery in parts of the Eurozone. Meanwhile, the US dollar remains firm amid persistent uncertainty about Federal Reserve policy trajectories.
Key Technical Levels:
– Resistance: 1.1050 and 1.1100
– Support: 1.0950 and 1.0880
From a technical standpoint, the EUR/USD remains in an uptrend channel on the daily chart, but bullish momentum is weakening. The Relative Strength Index (RSI) is approaching overbought territory, and a temporary pullback toward the 1.0950 area may occur before bulls attempt another push higher.
Fundamental Factors:
– The ECB continues to hold interest rates steady and is expected to maintain a dovish tone until data justifies policy tightening.
– Recent inflation readings from Germany and Spain came in below expectations, weighing on the euro.
– Market participants await eurozone-wide inflation data and the release of minutes from the latest ECB meeting.
Trading Strategy:
Traders should watch for a retracement toward the 1.0950 support. A bounce from that level could provide a buying opportunity with a target at 1.1100. A break below 1.0880 would signal increased bearish momentum.
GBP/USD: Sterling Seeks Direction Ahead of Economic Data
The British pound has struggled to maintain momentum above the 1.2750 level, with concerns over economic growth and Bank of England (BoE) policy direction. The pair is trading within a tight range, awaiting clarity from high-impact data releases.
Key Technical Levels:
– Resistance: 1.2750 and 1.2830
– Support: 1.2625 and 1.2550
The GBP/USD is trading in a sideways pattern, with price action consolidating between the resistance and support zones. A breakout on either side of the range could determine the next directional move.
Fundamental Factors:
– Market focus is on upcoming UK GDP and labor market data, which will shape expectations for BoE interest rate decisions.
– Inflation in the UK remains above target, though signs of cooling in price pressures may reduce the likelihood of further tightening.
– Political developments, including trade negotiations and leadership commentary, remain a background risk.
Trading Strategy:
Buyers may consider long positions near the 1.2625 area if price action shows bullish reversal patterns, targeting 1.2750 and above. A decisive break below 1.2550 would open the door for deeper losses toward the 1.2400 area.
USD/JPY: Yen Remains Under Pressure from Diverging Policy
The USD/JPY pair is holding above the key psychological level of 145.00, driven by sustained interest rate differentials between the Federal Reserve and the Bank of Japan (BoJ). While the BoJ has hinted at eventual policy
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