Technical look on Gold, USD/JPY, GBP/USD [Video]

Metals sell-off – Gold

Gold’s painful sell-off - the steepest in decades (over 20%) - extended on Monday after the CME Group raised margins on metal futures, pushing the price down to 4,402 – the lowest level in nearly a month. The record rally to 5,597 came to an end after President Trump surprised markets by appointing the not-so-ultra-dove Kevin Warsh as the next Fed chairman on Friday, raising doubts over the durability of monetary easing once Powell’s term ends in May. Balanced geopolitical tensions between the US and Iran, along with a sharp Wall Street pullback, likely encouraged profit-taking ahead of Friday’s US nonfarm payrolls report too.

From a technical standpoint, the correction erased nearly half of the October–January upleg before finding support near October’s high at 4,381, preserving the broader bullish structure. Short-term downside risks remain as momentum indicators suggest the market is not oversold. However, losses may stay limited unless prices close below the ascending trendline and the 50-day SMA near 4,480. A confirmed break lower could expose the 4,250 support area.

US Nonfarm Payrolls – USD/JPY

USDJPY rebounded above 154.00 following the Warsh nomination after dropping to a three-month low of 152.00 last week. Still, the recovery appears fragile, with the pair capped near the 154.80 resistance zone and trading well below the 20- and 50-day SMAs clustered around 156.15. Momentum indicators remain subdued, reflecting cautious sentiment.

Market attention is now turning to the Fed commentary and key US data, including the ISM PMI and jobs figures, which could reveal whether divisions among policymakers may intensify ahead of the leadership transition in May. Friday’s nonfarm payrolls report is expected to show a modest increase of 64k jobs, up from 50k previously, while the unemployment rate is seen holding at 4.4% and wage growth easing to 3.6%. A downside surprise - particularly a rise in the unemployment rate- could drive the pair back towards the 152 support area, with further weakness potentially targeting the ascending trendline near 150.85.

Japan’s snap election on February 8 could be a source of volatility in the coming days, with investors likely becoming more sensitive to any political rhetoric over currency movements and Takaichi's fiscal stimulus plans.

BoE rate decision – GBP/USD

UK markets have been barely making any headlines lately, but the Bank of England’s rate decision on Thursday could inject fresh volatility. Policymakers are expected to keep rates unchanged at 3.75%, though all eyes will be on the voting split as only two policymakers are expected to dissent and call for a rate cut, compared to five previously. Given persistent inflation, such a decision could be justified, though with the unemployment rate rising to its highest level since 2021, it will be interesting to see whether the debate over lower interest rates heats up again or the voting structure surprises. With the US criticizing the UK over its efforts to improve trade ties with China, the central bank may maintain a data-dependent approach.

Technically, GBP/USD’s pullback from a four-year high stabilized near the 23.6% Fibonacci retracement of the November–January rally at 1.3665, suggesting buying interest has not completely faded out. A deeper decline below the 1.3540 zone might be needed to challenge the broader bullish outlook.