Pips for Breakfast: January 21, 2026

President Trump is currently playing a very expensive game of tag with the Atlantic Ocean, and the British Pound is preparing to explain why everything still costs too much.

On This Day

January 21 isn't usually the day empires fall, but it's a favorite for the ECB to remind everyone that the Euro is a project, not just a currency. Back in 2016, Mario Draghi hinted at more easing and sent the EUR/USD into a tailspin. He was very good at saying a lot by saying very little.

The Play

Short GBP/USD: The UK CPI print is the main event. If the number beats the 3.3% forecast, don't expect a celebratory rally. The market is already pricing in a "sticky inflation means high rates" narrative that's starting to feel like a crowded trade. If it misses, Cable could drop faster than a politician's approval rating.

Long CHF/JPY: If you like record highs, this is your pair. With JGB volatility spiking and the Japanese opposition demanding bond buybacks, the Yen is looking less like a safe haven and more like a liability. The Swissie remains the only adult in the room.

What's on Deck

GBP CPI (02:00 UTC): This is the high impact event of the morning. The forecast is 3.3%. Anything higher makes the Bank of England's life miserable, which is usually bad for the currency in the long run.

ECB President Lagarde (02:30 & 11:45 UTC): She's speaking twice today. Usually, the second speech is just a remix of the first, but keep an eye on EUR/USD for any accidental clarity.

The Davos Circus (04:15 UTC): The WEF meetings continue. Expect lots of talk about "global resilience" while billionaires eat tiny, expensive sandwiches.

President Trump (08:30 UTC): Assuming Air Force One stops having electrical tantrums, he'll speak in Davos. Given the South Korean chip tariff headlines, expect the USD to move on any mention of "fair trade" or "reciprocity."

The Data Behind the Patterns View Packages →

Quick Pips

AUD/USD: Watch the employment change tonight. It's a high impact print for a currency that's already sensitive to the "China is slowing down" narrative.

USD/JPY: Japan's bond market is getting twitchy. If JGB volatility doesn't settle, the BOJ might be forced to actually do something, which is a prospect they generally loathe.

EUR/GBP: This pair will be caught in the crossfire between UK inflation and Lagarde's rhetoric. It's a great day to be a spectator here rather than a participant.

Why Your P&L Cares

The January Effect isn't just a myth told to new traders to keep them awake. It's the period where funds realize their December projections were wildly optimistic and start panic-buying or selling to fix the balance sheet. Historically, the EUR/USD sees its most directionless but violent moves in the third week of the month.

Today's mix of Davos speeches and UK inflation is a classic recipe for "stop loss hunting." When world leaders talk about trade tariffs, like the current South Korean spat, liquidity tends to thin out. Thin liquidity means your 20-pip stop might as well be a polite suggestion rather than a hard command.

The Bottom Line

The market is currently juggling a broken airplane, a chip war, and a British public that really wants cheaper butter. It's a lot to handle before lunch. Keep your positions small and your cynicism high. Now go make some pips. You're fed.