Pips for Breakfast: February 6, 2026

Japan is holding an election on Sunday, which means JPY traders are currently spending their Friday pretending they understand Japanese parliamentary procedure.

On This Day

In 2018, the markets were still reeling from "Volmageddon" which happened earlier in the week. The VIX spiked, short-volatility funds evaporated, and a lot of people learned that "it works until it doesn't" is a valid investment thesis. Today, we're just hoping the CAD labor data doesn't require a similar lesson in physics.

The Play

Watch USD/CAD: We have a double header of CAD labor data and USD Consumer Sentiment today. If Canada's employment change misses the 5.2K mark while US sentiment stays resilient, the Loonie might end the week looking like those Amazon shares in the Asia-Pacific session. Trashed. Shorting CAD/JPY is the alternative play if you think Japan's election nerves will spark a flight to safety before the weekend. Either way, the CAD is the one to watch for the exit.

What's on Deck

CAD Employment Change (08:30 UTC): The forecast is 5.2K. This is a remarkably low bar for a country that usually loves its labor market. If they miss this, expect the Loonie to take a dive into the weekend.

USD Prelim UoM Consumer Sentiment (10:00 UTC): The forecast is 55.0. This is basically a vibe check for the American consumer. If the vibes are off, the Dollar might lose some of its weekly gains as traders head for the exits.

The Japan Election (Sunday): Takaichi is seeking a strong mandate. The Yen is currently hiding under a desk. Expect significant gap risk when the markets reopen Sunday evening.

The Data Behind the Patterns View Packages →

Quick Pips

GBP/USD: Cable has been drifting all week like a boat without a motor. If USD sentiment comes in weak, we might see a small Friday short squeeze to end the week.

AUD/USD: The Aussie is feeling the heat from the Amazon selloff in Asia. It's a classic case of guilt by association.

USD/JPY: Traders are already squaring up before the Sunday vote. Liquidity might get thin by 4pm EST. Don't be the person holding a massive unhedged position into a weekend election unless you enjoy staring at charts on a Sunday night.

Why Your P&L Cares

This week has been a masterclass in USD dominance and tech nerves. Seasonally, February usually keeps the January momentum going until it suddenly decides to stop around Valentine's Day. We're still in the "continuation" phase.

However, it's Friday. The "weekend effect" is real. Traders who've been riding the USD long trade all week often choose today to bank their profits. This usually leads to those annoying counter-trend moves in the final two hours of the New York session. If you see the Dollar suddenly dropping for no apparent reason at 3pm EST, that's just the smell of profit taking.

The Bottom Line

It's the end of a week where Amazon got hammered and central bankers continued their tradition of saying a lot without saying anything at all. Markets close at 5pm EST. If you're still in a trade at 4:59pm, you're either very confident or you've forgotten how time zones work. Next week, we'll be parsing the Japan election results and seeing if the US consumer is actually as depressed as the surveys suggest.

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