📰 The real volatility last week wasn’t in price — it was in policy signals.
Capital adjusted not because growth collapsed, but because political risk rose.
🎙️Trade tensions moved back into headlines. Energy markets reacted to geopolitical pressure. Leaders at global forums openly discussed economic fragmentation. The message was clear: policy decisions are now market drivers.
💹 Markets are repricing geopolitical risk and reassessing policy credibility in real time. The shift isn’t emotional. It’s calculated — and the Dollar/Yen sits at the centre of it.
And that lens explains everything below 👓.
🇪🇺 EURUSD — Bullish
Political uncertainty in the US is quietly weighing on confidence. Trade rhetoric, fiscal debates, and questions around policy direction are making investors reconsider how much exposure they want to the dollar.
Meanwhile, the Eurozone benefits from relative stability. It doesn’t need explosive growth — just fewer political shocks.
EURUSD H4 Chart
📈 Technical View:
Strong rejection from the key demand zone (0.5 retracement area), showing buyers are defending structure.
Price is holding above the green box — as long as that level holds, bullish bias remains intact.
Higher lows forming after the retracement suggest momentum is rebuilding.
A sustained push above recent consolidation highs opens room toward the 1.22 area next.
Structure is constructive. Holding support is the key.
🔎 What to watch this week:
Any escalation in US trade rhetoric
EU political commentary or fiscal coordination headlines
US data that strengthens rate-cut expectations
If US political noise rises, EURUSD stays bid.
🇯🇵 USDJPY — Bearish
Policy divergence is back in focus.
The US faces growing political pressure around fiscal discipline and trade positioning. Meanwhile, Japan continues to slowly shift away from ultra-loose policy — and that matters.
When political risk rises in the US, the yen tends to benefit. It’s not about Japan being strong. It’s about capital seeking stability.
We took a USDJPY short on 9th Feb, aligned with our analysis — called live on X — targeting weakness driven by this shift in narrative.
USDJPY Shorts called live on X (Hourly Chart 9/2/2026)
USDJPY H1 Chart (13/2/2026)
📉 Technical View:
Clear lower highs and lower lows — structure remains decisively bearish.
Price rejected from the supply zone and continued respecting the descending trendline.
First target near 152.18 — to secure 80% of the volume; momentum still pointing lower.
Below 152.18 opens room toward 151.54, with 149.37 as the broader downside objective.
Trend is intact. Rallies remain sellable while structure holds.
🔎 What to watch this week:
US political headlines (especially fiscal or tariff related)
Any comments from Bank of Japan officials
Moves in US bond yields
If US yields soften while political tension rises, USDJPY can continue lower.
⚜️ XAUUSD (Gold) — Neutral, Leaning Bullish
Gold is quietly building strength.
It’s not exploding higher because markets aren’t in crisis mode. But geopolitical tension, energy supply risks, and trade fragmentation are keeping downside limited.
Gold doesn’t need panic. It just needs uncertainty.
XAUUSD (Gold) H4 Chart
📈 Technical View:
Price is holding firmly inside the key demand range — structure remains constructive.
Clear reaction from the lower boundary suggests buyers are still defending this zone.
Early signs of a short-term momentum shift higher from this level.
A clean break above range highs opens the path toward 5,597 (short-term target).
Bias remains supported while price holds this key zone.
🔎 What to watch this week:
Escalation in geopolitical tension (US-Iran Tensions)
Oil price volatility
Any political shock headlines
As long as politics remain unstable, dips in gold are likely supported.
🦾 NQ Futures (Nasdaq) — Neutral, Ranging
Tech is strong. But liquidity is tight.
Political uncertainty caps upside enthusiasm. Trade risks threaten global supply chains. Fiscal concerns limit how aggressive risk appetite can become.
At the same time, there’s no full-blown risk-off move. Earnings are stable. Buybacks continue.
📊 This creates a range environment.
NQ Futures Daily Chart
📈📉 Technical View:
Price remains clearly range-bound between major supply above and demand below.
Recent rejection from the upper half of the range keeps upside capped for now.
Downside is slightly favored, but no confirmed breakdown yet.
A clean break below range lows opens room toward 23,526; until then, expect chop.
Still a positioning market — patience over prediction.
🔎 What to watch this week:
Political developments impacting tech supply chains
US bond yield direction
Any new regulatory or trade announcements
Money is rotating — not rushing in.
🧩Final Word
Markets don’t collapse overnight. They rotate first.
When politics starts driving economics, capital becomes selective. It looks for stability. It avoids uncertainty. And it quietly shifts before the headlines catch up.
This week isn’t about predicting chaos. It’s about recognising positioning.
Dollar confidence is being tested (as always). Policy direction matters more than data. And volatility will likely stay selective, not explosive.
Stay disciplined.
Stay patient.
Let the narrative guide the bias — not the noise.
Stay safe, stay patient, and happy trading.
— The UE Market Letter Team 👁️🗨️
NOTE: Any positions we enter will be called live on our X account — in real time, as always.
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