Technical Analysis Today

[Zerologic]

GBP/USD moves near the consolidation line

The GBPUSD movement this week shows limited gains. After falling to 1.33907, the price attempted a rebound to 1.34948, but failed to extend the gains and fell to 1.34173. On Wednesday, January 14th, the GBPUSD drew a bullish candle with a smaller body than the previous bearish candle. The GBPUSD price movement focused within a range near the middle band line, which is the consolidation line for price divergences.

Fundamental factors influencing the GBPUSD price movement from the UK perspective include UK borrowing costs, interest rate policy, and economic data.

Although UK government bonds fell to their lowest level in over a year, reflecting market expectations of a potential BoE interest rate cut, this is typically bearish for the pound as lower yields tend to depress capital inflows.

The Bank of England (BoE) sees inflation approaching its 2% target, making further interest rate cuts likely this year, which could weaken the GBP against the USD in the short term.

UK economic growth is expected to slow, and data through this week, including GDP, could disappoint, reinforcing the monetary easing narrative.

From a USD perspective, US economic data continues to show relative strength, leading to expectations that the Fed's monetary policy could remain tighter than the BoE's, which in turn could support the USD.

Net long dollar positions decreased, reflecting traders' reduced bearishness on the USD, but still showing fundamental support for the USD relative to the GBP.

Today, traders will focus on the important economic data schedule for the GBP and USD. UK data focuses on monthly and annual GDP. This is a key indicator of UK economic growth, crucial for GBP sentiment. Weak growth could strengthen expectations of a BoE interest rate cut, which could pressure the GBP. Besides GDP, other data that may have an impact include the trade balance and industrial and manufacturing production, which provide signals about real UK activity.

In the New York session, traders will focus on manufacturing and employment data. If US jobless claims are higher than expected, the USD could weaken. Philadelphia Fed Manufacturing Index and Empire State Manufacturing Index: These two indexes measure manufacturing conditions in key US regions. Figures above 0 indicate expansion; positive readings can support the USD. Retail sales measure the strength of US household consumption. Strong data will strengthen the case for the Fed to delay interest rate cuts, which supports the USD.

GBPUSD price range forecast: nearest support is around 1.34000-1.34200. Lower support is around 1.33200-1.33500. Nearest resistance is around 1.34600. The next resistance, the upper limit of the current price range, is around 1.35000-1.35200. The daily range is estimated between 1.32970 and 1.3566, with a pivot point around 1.34320.

 

[Zerologic]

WTI oil prices retreat amid easing geopolitical tensions and oversupply

WTI oil prices briefly rose to a high of 62.17 on January 14, 2026, but failed to sustain its bullish momentum and retreated to a low of 58.78 the following day. The price drew a long-bodied bearish candle with almost no shadow, forming a high of 60.94, a low of 58.78, and a close of 58.82.

Current market sentiment is bearish, driven by several key factors, such as easing geopolitical tensions, oversupply, and US dollar sentiment.

Oil prices had surged due to concerns about a US-Iran military conflict. However, Donald Trump's statement indicating that the risk of a direct attack had subsided removed the risk premium from oil prices. This triggered a nearly 5% drop to 59 in yesterday's trading.

The capture of President Nicolas Maduro by US forces in early January created political uncertainty. Although Venezuela has substantial oil reserves, its current production is below 1 million barrels per day, so the direct impact on global supply remains limited.

The International Energy Agency (IEA) projects a supply surplus of around 3.8 million barrels per day in 2026. This is because US production remains high, while OPEC+ has begun to reduce its production, which has put structural downward pressure on prices.

Political tensions between the US government and the Federal Reserve have fueled uncertainty, impacting US dollar fluctuations, sometimes leading investors to turn to gold rather than energy commodities.

According to the latest EIA report, US crude oil inventories are in the range of 419 to 425 million barrels. Despite an unspecified decrease of 3.8 million barrels in the first week of January, the overall figure is considered adequate. Delivery inventories at Cushing, Oklahoma, reportedly increased by around 700,000 barrels, which technically puts negative pressure on WTI futures prices.

The combination of high US domestic inventories and a global supply glut is creating a super glut, also known as a supply glut.

Analysts such as Goldman Sachs project that the average WTI price in 2026 could fall to around $52 per barrel if the buildup continues without drastic cuts from major producers.

Fundamentally, geopolitical issues such as those in Venezuela, Greenland, Denmark, and Iran tend to be temporary impact. Traders often employ a sell-on-strength strategy, selling when prices rise temporarily as oil inventories remain high.

The forecasted WTI oil price range: nearest support is around $58.00-$59.00 after the massive sell-off. Key support is projected to be around $54.00-$57.00. Nearest resistance was around $61.50-$62.80 before the price crash. Key resistance is projected to be around $65.00-$68.00 if a new escalation occurs in the Middle East or Venezuela.

 

[Zerologic]

CAD Awaits Crucial Data While US Banks Close

Commodity currency, USD/CAD price movement on Friday last week followed a bullish candle with a shadow at the top of the candle. The price formed a high of 1.39289, a low of 1.38839, and a close of 1.39094.

Overall, USD/CAD is predicted to experience unique volatility today, as the US market is closed for Martin Luther King Jr. Day. On the other hand, Canada will release crucial economic news related to inflation, which could trigger CAD movements.

The Martin Luther King Jr. Day holiday means US banks are closed today, which means trading volumes will likely be lower than usual. The USD's movement is likely to remain stagnant unless there is an unexpected statement from a political figure at an international forum that garners a global market response.

President Donald Trump is scheduled to attend the World Economic Forum (WEF) in Davos today. Comments on trade tariffs or the ongoing Greenland issue could influence market sentiment.

The US dollar remains relatively strong against other currencies due to expectations that the Fed will hold interest rates at its January meeting, and the lack of strong near-term rate cut signals, which has kept pressure on the USD. The US CPI rose as expected, reinforcing the assumption that the Fed is in no rush to cut interest rates this month, which typically supports the USD.

The US dollar index (DXY) is showing bullish sentiment above its 50-day moving average (MA), reaching a high of 99.483 on Friday, January 16, indicating that the USD is still relatively strong.

Canada will release inflation data today, which could potentially be a driver for the CAD. Consensus estimates annual inflation at 2.2%. If the CPI data exceeds consensus, this could support the CAD by reducing the likelihood of the BoC cutting interest rates in the near future. Conversely, if the CPI data falls short of consensus, this could pressure the CAD by confirming an economic slowdown.

As a commodity currency reliant on oil exports, the CAD is also affected by fluctuations in oil prices. WTI prices are currently in the range of $58-$62 per barrel. Concerns about the normalization of Venezuelan oil production under US influence have placed additional pressure on the competitiveness of Canadian heavy oil, fundamentally limiting CAD strength.

The CAD has weakened several times due to weak domestic economic data and a narrower bond yield differential compared to the US, making Canadian investment yields less attractive.

US policy uncertainty, including Fed dynamics and geopolitical volatility, is likely to remain the main driver of risk sentiment. When risk-off increases, the USD, as a safe-haven, is supported. However, there is also bullish sentiment in the CAD stemming from expectations of a recovery in trade relations (UMSCA), which could reduce upward pressure on USDCAD in the medium term.

Today's price range forecast, based on technical data, shows the nearest support is around 1.38700, with the next support target around 1.37800 if a major sell-off occurs in the USD. The nearest resistance is around 1.39850, with the next resistance target around 1.40600. Price forecasts are subject to error due to sudden changes in market dynamics.

 

[Zerologic]

GBP/JPY Rebounds at the Start of the Week Awaiting UK Economic Data

The GBP/JPY cross pair attempted to rise on Monday after three consecutive days of declines the previous week. The pair drew a bullish candle engulfing the previous candle, indicating a strong rebound. The current price formed a high of 212.388, a low of 207.768, and a close of 210.921.

The Japanese yen had weakened sharply due to speculation of a snap general election in Japan that could prompt fiscal stimulus and accommodative monetary policy. However, comments from Japanese officials about the possibility of currency intervention to support the yen have caused the JPY to strengthen again in recent sessions, pressuring GBP/JPY movements.

Japan's interest rate is currently at 0.75%, a 30-year high. The market is highly cautious ahead of the Bank of Japan's policy meeting this Friday.

The yen has weakened significantly recently, raising concerns that the Japanese government will intervene in the market. Governor Ueda is expected to remain hawkish to prevent further yen weakening.

Japanese manufacturing sector data, released yesterday, showed a contraction in core machine orders, which had previously negatively impacted the yen.

On the GBP side, the focus is on employment data. The market is awaiting the UK labor market report. Investors' primary focus is on wage growth. If wages remain high, the Bank of England (BoE) will likely maintain high interest rates for longer to suppress inflation, providing bullish support for the GBP.

Although UK GDP growth in 2025 is projected to slow by around 0.1%, household consumption remains resilient. However, the rising unemployment rate to 5.1% is beginning to put pressure on the long-term attractiveness of the GBP.

The focus of today's economic data in the London session is the Average Earnings Index. If wage growth exceeds the previously forecast range of 4.6%-4.7%, UK inflation is considered persistent, reinforcing expectations that the Bank of England (BoE) will delay interest rate cuts. Claimant Count Change is the second focus of data from the UK. The change in the number of people claiming unemployment benefits, previously at 20,000, is expected to fall to 15.6,000. A lower-than-expected figure indicates a still-tight labor market. The unemployment rate is expected to remain stable at around 5.1%; a surprise increase could weaken the GBP.

The main sentiment in fundamental analysis is that GBP is likely to strengthen due to higher interest rates, but the yen could strengthen at any time if there are strong statements from BoJ officials ahead of Friday's meeting.

Today's GBPJPY price range forecasts the nearest support at 197.60 if a technical correction occurs. The second support target is around 196.10, considered a crucial resistance level if risk-off sentiment or verbal intervention by the BoJ emerges. The nearest resistance is around 212,400, a psychological barrier that could confirm a bullish trend. The second resistance target is around 214,300, a crucial level for yen weakening. This forecast could be incorrect given the flexible market dynamics.