Pips for Breakfast: January 12, 2026

Jerome Powell and the White House are trading insults again, which is exactly how you want your Monday to start if you enjoy chaotic price action.

On This Day

Historical data shows that mid-January is usually when the "New Year, New Me" optimism in the markets starts to curdle. While the calendar is often quiet, the USD typically finds its footing around this date as institutional rebalancing flows finally settle into a trend. It's the day reality usually invites itself over for a very awkward conversation about your holiday positions.

The Play

EUR/USD is the primary focus for the session. With the French government facing a potential collapse over budget disputes, any rally toward the 1.0920 level looks like a selling opportunity. Political instability in the Eurozone's second largest economy isn't exactly a recipe for a strong currency.

If you're looking for more excitement, watch USD/JPY. The rumor mill regarding Prime Minister Takaichi calling a snap election is spinning fast. If the headlines turn concrete, expect the Yen to move with the kind of velocity usually reserved for a Shinkansen. The 142.50 level is the line in the sand for a potential breakdown.

What's on Deck

The economic calendar is officially on a diet today. There are no major data releases scheduled, which means the market will be entirely driven by technical setups and the ongoing shouting match between the Fed and the executive branch.

Central Bank Speakers: Watch for any unscheduled comments from Fed officials. When the independence of the central bank is questioned, they tend to get chatty.

The French Budget: Any news out of Paris regarding confidence votes will move the EUR faster than any GDP print could.

The Data Behind the Patterns View Packages →

Quick Pips

GBP/USD: The pair is stuck in a tug-of-war. Hiring is weakening, which screams "rate cut," but wage growth is staying firm, which screams "hold on a second." Expect a choppy range between 1.2650 and 1.2720.

AUD/USD: Risk sentiment is retreating as the Powell investigation heats up. The Aussie is the proverbial canary in the coal mine here. If it breaks 0.6680, the "risk off" trade is officially in the driver's seat.

Gold: It's loving the drama. Political instability in France plus a Fed under fire is a gold bug's dream scenario. It's eyeing a test of recent highs if the rhetoric doesn't cool down.

Why Your P&L Cares

The January Effect isn't just a catchy phrase for CNBC pundits. Historically, early January volatility stems from the fact that everyone is trying to be first to the new theme of the year. In previous years, this week has seen massive reversals in the EUR as reality hits the fan.

Today's news about the Powell investigation adds a layer of "regime risk" to the USD that we haven't seen in a while. Usually, we look at inflation or employment to price the dollar. Now, we're looking at lawyers and congressional hearings. This shifts the focus from macroeconomics to political theater, and theater is always more volatile than a spreadsheet.

The Bottom Line

The calendar is empty, but the headlines are full of enough drama to keep your margins interesting. Watch the political noise in D.C. and Paris. If the foundations of central banking start to look shaky, your charts will too.

Now go make some pips. You're fed.