Major Currencies Face Pivotal 2026 as Policy Divergence Drives Outlook
As 2026 kicks off, currency traders are at the crossroads amid central bank policy divergence and technical developments. Since delivering 175 basis points worth of cuts since September 2024, the Federal Reserve is at the crossroads. At the same time, the European Central Bank (ECB) has concluded its easing cycle, while the Bank of Japan (BoJ) looks to embark its first meaningful tightening cycle in decades . Technically, the U.S. dollar is performing poorly against major currencies and is near multi-month lows. We will take a look at the greenback versus the USD/JPY, EUR/USD and GBP/USD from both a fundamental an technical perspective.
USD/JPY Forecast
Source: https://sigmanomics.com/forex-markets/usdjpy
The attached chart of USD/JPY displays a symmetrical triangle that has developed since mid-2024. With breakout direction to the upside, bullish targets lie at 165-170; howevever, should support give away, bears will look to 140-145. All in all, the technical formation suggests that the USD/JPY will continue to the upside, but traders should proceed with caution as RSI bearish divergence is apparent.
EUR/USD Forecast
Source: https://sigmanomics.com/forex-markets/eurusd
As 2026 kicks off, currency traders are at the crossroads amid central bank policy divergence and technical developments. Since delivering 175 basis points worth of cuts since September 2024, the Federal Reserve is at the crossroads. At the same time, the European Central Bank (ECB) has concluded its easing cycle, while the Bank of Japan (BoJ) looks to embark its first meaningful tightening cycle in decades . Technically, the U.S. dollar is performing poorly against major currencies and is near multi-month lows. We will take a look at the greenback versus the USD/JPY, EUR/USD and GBP/USD from both a fundamental an technical perspective.
GBP/USD Forecast
Source: https://sigmanomics.com/forex-markets/eurusd
As 2026 kicks off, currency traders are at the crossroads amid central bank policy divergence and technical developments. Since delivering 175 basis points worth of cuts since September 2024, the Federal Reserve is at the crossroads. At the same time, the European Central Bank (ECB) has concluded its easing cycle, while the Bank of Japan (BoJ) looks to embark its first meaningful tightening cycle in decades . Technically, the U.S. dollar is performing poorly against major currencies and is near multi-month lows. We will take a look at the greenback versus the USD/JPY, EUR/USD and GBP/USD from both a fundamental an technical perspective.
sigmanomics
This has been written, compiled, and technically developed by the Sigmanomics team. The depth team includes, but is not limited to, Mikhail Antropov, Ronald Francois, Matthew Williamson, and Solieman Younus.
