This week's five highlights

There were no fireworks this Christmas to New Year. No flash crash, no boom, geopolitics stay the same with the Ukraine-Russia war. Trump also stays the same with his tariff threat before he goes into office. 

King Dollar is back to start the New Year, beating up most major currencies as the Trump effect piles in. Market participants anticipates less rate cut under Trump's regime and see U.S. Treasury Yields staying at high. The risk aversion from U.S. equities sell off is also boosting the bids in USD as haven seeking activity picks up.  

On the chart, cautious trade is giving way to a fresh break higher, with broad July 2023 gains currently focused on the 109.00 Fibonacci retracement. Mixed daily readings are showing early signs of improvement and weekly charts are positive, highlighting room for a later break above here and continuation towards congestion resistance at 110.00. Meanwhile, support remains at 108.00. A close beneath here, if seen, would turn sentiment neutral and prompt consolidation above 107.50. Rising weekly charts should limit any deeper reactions in renewed buying interest above support at 107.00.

While King USD is giving a beat down to others, JPY is no different but with a catch, the threat of intervention. USD/JPY is once again a few figures away from historical weakness but the lack of strong verbal intervention seems to suggest the BoJ is unlikely to intervene at the current level and maybe not at the same level as previous intervention. It is quite understandable at this time when the BoJ could be tightening and support the JPY to a certain extent. However, the odds of a January hike from the BoJ is not certain, given the rhetoric they gave in December, there maybe new high in the cards.

On the chart, the pair is choppy in consolidation below the 158.00 level as prices unwind the overbought daily studies. Further ranging action seen for now within the 158.00/156.00 area though the underlying bullish structure suggest scope for break above 158.00. Break, if seen, will open up further gains to the 158.85 resistance and the 159.00 level. Beyond these will see potential for extension to target the 160.00 figure. Meanwhile, support at the 156.75/156.00 area underpin. Break of the latter will confirm a small top pattern at the 158.00 high and open up room for deeper correction to 154.71/154.00 support.