Pips for Breakfast: January 5, 2026

Good morning. Your coffee is hot and the USD is looking for a reason to exist. Here is what is on the menu.

On This Day

In 2015, the market spent early January wondering if the Swiss National Bank was telling the truth about its currency floor. Spoiler. They were not. In 2019, traders spent this week recovering from a flash crash that made AUD/JPY look like a falling knife in a dark room.

The Play

USD/JPY Long Potential: The ISM Manufacturing PMI is the big fish today. If we get a beat on that 48.3 forecast, expect the Dollar to flex. Since the manufacturing sector has been essentially hibernating since late 2024, any sign of life will send the Yen bears back into their caves.

EUR/USD Fade: It is the first Monday of the full trading year. Historical volatility is high. If the pair spikes on January Effect rebalancing, look for a reversal once the ISM data hits the wires at 10:00 UTC. The Euro tends to get overexcited in the morning before reality sets in.

What's on Deck

ISM Manufacturing PMI (10:00 UTC): This is the heavyweight champ today. The forecast is 48.3. If it comes in higher, the "US recession" crowd will have to find a new hobby.

ISM Manufacturing Prices (10:00 UTC): Watch this for inflation vibes. If prices rise faster than expected, the Fed might start getting those itchy hawkish fingers again.

Venezuela Headlines: Keep an eye on Crude. The Maduro capture trade is making things messy. If oil spikes, CAD and NOK will be the primary beneficiaries. If you are trading Brent, keep your seatbelt fastened.

The Data Behind the Patterns View Packages →

Quick Pips

AUD/USD: Australia services PMI showed price pressures. If the RBA thinks it needs to stay hawkish while US data misses, we could see a 50 pip run.
GBP/USD: Cable is mostly a passenger today. It will go wherever the Greenback tells it to go.
Gold: Metals jumped on the Venezuela situation. If the geopolitics get weirder, $3,000 might start looking like a realistic floor rather than a fever dream.

Why Your P&L Cares

The first week of January is basically Market Re-Entry 101. Large funds are moving billions of dollars around just to prove they still have jobs. Historically, the January Effect creates a liquidity vacuum where small orders move prices in ways that do not make sense.

Look back at 2015 or 2019. The start of the year is when the surprises happen because everyone is still a little hungover from the holidays. Today ISM print is the first real test of whether the US economy is actually cooling or just taking a nap. If the manufacturing sector stays in contraction, the soft landing narrative starts to look like a hard landing with better marketing.

The Bottom Line

The calendar is light until 10:00 UTC, so do not get chopped up in the pre-market noise. Either the US economy is breathing again or it is not. Trade the reaction, not the hope. Now go make some pips. You are fed.