Weekly Forex Forecast: January 4th to 9th, 2026
Adapted from the original article by DailyForex
As global markets open the new year, traders are closely watching the movement of major currency pairs to identify breakout patterns following a relatively quiet holiday season. The trading week from January 4th to 9th, 2026, will be dominated by a return of liquidity, hints of potential rate changes, and the impact of economic data releases which may shape expectations for Q1 2026.
The foreign exchange market is expected to reawaken as institutional investors step back into the field. Below is a technical assessment of the key currency pairs heading into the first full trading week of 2026, with insights on potential support, resistance zones, and the fundamental factors that might steer trader sentiment.
EUR/USD Technical Outlook
The EUR/USD pair starts the week exhibiting bullish potential. Bears attempted to pull the market down during the final week of December, but bulls held their ground impressively in the 1.0850 zone, preserving the uptrend established in Q4 last year.
– Support Levels:
– 1.0850 remains a robust medium-term support
– 1.0780 is key if the previous level fails
– Resistance Levels:
– Initial resistance is near the 1.1000 psychological level
– Followed closely by 1.1040, a historical price ceiling
– Technical Indicators:
– The 50-day moving average is below current price, reinforcing bullish sentiment
– RSI on D1 chart is near the 60 mark, indicating room to rally without triggering overbought signals
Key Factors:
– Market participants are likely to react to any statement from the European Central Bank concerning potential tightening or dovish measures in Q1
– The pair’s direction could be affected by any surprises in German inflation and eurozone unemployment data
Looking ahead, the pair could aim to test the 1.1000 and 1.1040 resistance levels if U.S. data supports further USD softness. However, a break below 1.0850 would expose downside risk toward 1.0780 and signal potential weakness in euro bulls.
GBP/USD Weekly Technical Forecast
The British pound is showing firm support near the 1.2700 region, rebounding solidly from any dips toward that area. The crude reawakening of market volumes in January suggests a possible retest of recent highs near 1.2800 and beyond.
– Support Levels:
– 1.2700 remains the key short-term support
– 1.2620 is pivotal on the downside should 1.2700 be breached
– Resistance Levels:
– 1.2800 represents the near-term ceiling
– 1.2850 serves as the next upper target if bullish continuation follows
– Technical Indicators:
– MACD momentum is positive, albeit flattening slightly
– RSI on H4 is hovering around 55, staying neutral but slightly favoring buyers over sellers
Fundamental Drivers:
– UK manufacturing and services PMI results could strongly influence short-term demand for GBP
– Any remarks from Bank of England officials will be closely scrutinized for signals of future rate hikes or cuts
As long as the pound holds above 1.2700, the technical picture remains mildly bullish. A breakout above 1.2800 may indicate a path toward 1.2850 and beyond, particularly if the U.S. dollar remains under pressure. On the flip side, a failure to hold 1.2700 might invite selling toward 1.2620.
USD/JPY Price Analysis
Having tested the 140.00 level, the USD/JPY pair has rebounded, showing mixed performance approaching the new year. The Japanese yen still benefits from safe-haven demand in risk-averse environments. However, an increase in U.S. Treasury yields could renew buying
Explore this further here: USD/JPY trading.