Pips for Breakfast: January 16, 2026

Japan’s finance ministry is threatening a joint intervention with the US, which is central bank speak for "please stop selling the Yen before we have to actually do something."

On This Day

In 2017, the pound spent the day curled in a fetal position ahead of Theresa May’s "Hard Brexit" speech. It dropped to its lowest level against the dollar since the October flash crash because traders realized that leaving a trade bloc usually involves, well, leaving.

The Play

GBP/USD: Governor Bailey is at the podium at 05:00 UTC. If he sounds even remotely concerned about the UK jobs survey overhaul or inflation stickiness, Cable could test its weekly lows. Watch the 1.2650 level. If it breaks, the weekend might start early for the bulls.

USD/JPY: We are officially in the "threat zone." Japan is making noise about US cooperation to prop up the Yen. This usually results in a 50 pip spike followed by immediate selling, but with a US aircraft carrier heading to the Middle East, geopolitical risk might actually give the Yen the safe haven bid the ministry is praying for.

What's on Deck

The Bailey Show: The BOE Governor is the main event. Given the ONS is currently struggling to count how many people actually have jobs in the UK, expect Bailey to be vaguely non committal. Vague is usually bearish.

Middle East Tension: Iran’s warnings and US naval movements are the "X factor" for Friday’s close. Oil and USD/CAD will be sensitive to any headlines coming out of the Persian Gulf during the New York session.

The Data Behind the Patterns View Packages →

Quick Pips

NZD/USD: Food prices in New Zealand fell for the second month. It’s not a pivot yet, but the Kiwi is looking a bit soft around the edges as the RBNZ reevaluates its life choices.

AUD/USD: Benefiting from the Canada-China thaw. If China is moving to rebuild ties with Ottawa, traders are betting Canberra is next on the "let’s be friends" tour. Agriculture and energy remain the primary love languages here.

EUR/USD: It’s Friday in mid-January. Seasonal rebalancing is in full swing. Don't be surprised by a random 40 pip move at 3pm EST when most traders have already mentally checked out for the weekend.

Why Your P&L Cares

This week was a masterclass in "wait and see." We saw the Yen try to bottom out while the Dollar Index flirted with multi month highs. The big story has been the January Effect, where funds move money around and pretend they have a cohesive plan for 2026. Historically, this week often sets the tone for the rest of the quarter.

The UK’s statistical office admitting they might delay their jobs survey is the cherry on top of a week defined by data uncertainty. If you survived the volatility of the last four days without blowing your stop losses, you’re doing better than the guys who tried to catch the falling knife on the Yen on Tuesday.

The Bottom Line

It’s Friday, the final lap. Markets close at 5pm EST (2pm PST) and liquidity will likely vanish shortly after the London fix. Don’t turn a winning week into a "learning experience" by overtrading the Friday afternoon lull.

Next week, we’ll see if Japan actually puts its money where its mouth is regarding intervention and whether the Middle East situation escalates or de-escalates while we’re all sleeping on Sunday.

Have a profitable close and a restful weekend. You're fed.