Yen Weakens Further, Gold Recovers, and DAX Tests Neckline Support

Welcome, traders, to the last trading day of the week — a relatively light one in terms of macroeconomic data, but still full of subtle shifts and early signs of potential trends for next week. On today’s calendar, we have just a few but important releases: job data from Canada and the Preliminary University of Michigan Consumer Sentiment Index from the U.S., both due during the American session. These could inject some late-week volatility, particularly into the Canadian dollar and U.S. dollar pairs.

Let’s start with the currency market, where this week clearly belonged to the American dollar. The USD has been performing well, regaining momentum across the board, supported by steady economic data and persistent risk-off sentiment in parts of the global market. In stark contrast, the Japanese yen continues to struggle, marking this week as one of its worst in months. The weakness is largely driven by political developments in Japan following the recent elections, where the victory of fiscal dove Takaichi sparked speculation of continued loose monetary policy. Yen pairs like USD/JPY and EUR/JPY have surged higher, reflecting this deepening divergence.

Moving to the commodities, gold saw a notable correction on Thursday, as traders took profits after setting new all-time highs earlier in the week. However, Friday brings renewed bullish momentum, with gold reclaiming ground and reinforcing its strong technical position. The safe-haven demand remains solid. In contrast, oil continues to face pressure. Despite a midweek rebound attempt on Wednesday and Thursday, the commodity has turned lower again. Friday’s session opens weak, reflecting ongoing supply-demand imbalances and fading optimism about near-term price recovery.

Turning to indices, the overall sentiment remains cautiously positive, but the tone has softened compared to previous weeks. U.S. indices such as the Dow Jones are about 1% lower for the week, signaling the start of a mild correction phase. The German DAX, however, stands out with a more concerning technical setup — Thursday’s session formed an ugly-looking shooting star candlestick, hinting at exhaustion in the bullish trend. Moreover, the index is now testing the neckline of a visible head and shoulders pattern, a break of which could trigger a sell signal going into next week.

All in all, it’s been a mixed week: a strong U.S. dollar, a struggling Japanese yen, a resilient gold market, and indices showing early cracks in their bullish trends. As we close out this week, attention will turn to today’s Canadian jobs data and U.S. sentiment report for the final clues on how traders will position themselves heading into next week.

Source: https://www.axiory.com/analytics/market-news/yen-weakens-further-gold-recovers-and-dax-tests-ne