🇬🇧 GBP/EUR Breaks Key Resistance at Start of 2026
GBP/EUR has started 2026 on the front foot, breaking above key resistance to hit its highest level since October at 1.1490.
The move marks a two-month high and follows a period of consolidation over the Christmas break, during which GBP/EUR struggled to sustain gains above the 100-day exponential moving average (EMA), currently located at 1.1470. By contrast, Sterling has weakened against the US dollar, with GBP/USD extending losses for a second consecutive session into the new year, despite beginning 2026 above the 1.34 level. Meanwhile, GBP/EUR continues to hover just below the 1.15 handle.
With the economic calendar relatively quiet at the start of the year, market price action is being driven more by broader macro themes. The dominant theme remains uncertainty surrounding President Trump’s policy outlook, which continues to shape overall market sentiment.
🇺🇸 USD Advances as Markets Assess US Action in Venezuela
The US Dollar is strengthening against its major counterparts on Monday as markets digest the potential implications of a large-scale US military action in Venezuela. The operation reportedly saw US forces enter Venezuelan territory and detain President Nicolás Maduro and his wife, Cilia Flores, who were subsequently taken to New York, under orders from President Trump.
This will be followed by a series of employment-related indicators, which could provide the dollar with further scope to extend its gains.
🇪🇺 Policy Expectations Bolster Short-Term Eurozone Yields
The Euro has started 2026 on the back foot against its major counterparts, with both the US Dollar and the Pound gaining ground. EUR/USD opened the week under pressure, slipping below the 1.17 level.
The week ahead brings a more data-driven focus for the Euro, with the Eurozone set to release key CPI inflation figures. Any upside surprise would reinforce expectations that the European Central Bank has reached the end of its easing cycle, increasing the likelihood that the next policy move could be a rate hike.
Such an outcome would support short-term Eurozone bond yields, which are closely tied to the ECB’s policy rate. Firmer bond yields would, in turn, provide support for the Euro, with additional attention on Eurozone retail sales data due later in the week.
This Weeks Key Market Moving Data
The start of the new year is set to be relatively quiet for the UK, with no major data releases scheduled to open the year. In contrast, the Eurozone faces a more eventful calendar, with key inflation figures and bloc-wide retail sales data due, both of which will be closely watched by markets. In the United States, attention shifts back to labour market indicators, led by the highly influential Nonfarm Payrolls report.
Wednesday January 7th
Core Harmonized Index of Consumer Prices (HICP)
(HICP) is important because it measures underlying inflation in the Eurozone, helping determine how quickly or slowly prices are rising. With question marks still remaining over the Eurozone inflation, this data will directly influence ECB interest-rate decisions, it can significantly move the Euro as markets react to shifting policy expectations.
Friday January 9th
Eurozone Retail Sales Data Release
The Eurozone Retail Sales data is a great economic indicator of consumer spending across the bloc, as it measures the volume of sales of goods by retailers directly to end customers. A strong reading is generally seen as bullish for the Euro, while a weak weeding is seen as bearish.
US Nonfarm Payrolls Release
The US Nonfarm Payrolls report is one of the most influential indicators of American economic health, showing whether job creation is accelerating or cooling. Because it heavily shapes Federal Reserve interest-rate expectations, the release can trigger significant moves in the US dollar as markets react to the labour market’s strength or weakness.
