The second week of February 2026 is shaping up to be a highly volatile period for the forex market. Traders are currently navigating a complex landscape defined by the aftermath of the Japanese snap elections, a shifting tone from the Bank of England (BoE), and highly anticipated US labor market data. To capitalize on these movements, it is essential to focus on pairs that have clear fundamental drivers and strong technical setups. Below are the top currency pairs to watch this week to find the best trading opportunities.
USD/JPY: Post-Election Volatility
The Japanese Yen is currently at the center of market attention following the snap elections held on Sunday, February 8. Prime Minister Sanae Takaichi’s victory and her pro-stimulus stance are major drivers for this pair.
Impact of the Snap Election
With the LDP securing a majority, markets expect a continuation of ultra-loose monetary policies or at least a very slow transition to higher rates. This has initially weakened the Yen, as investors favor the “stimulus-friendly” environment. Look for USD/JPY to test higher resistance levels near 155.00 and 158.00 if the political stability remains firm.
Monitoring Intervention Zones
While the fundamental bias is bullish for USD/JPY, traders must remain cautious of potential currency intervention from the Ministry of Finance. As the pair approaches the 158.00–160.00 zone, the risk of a sudden “shakedown” increases. Daily price action near these levels will be critical for determining whether the uptrend has more room to run.
GBP/USD: The Dovish Pivot
The British Pound is facing significant pressure after the Bank of England’s surprisingly dovish tone in their recent meeting. Despite keeping rates steady, the split in voting showed a growing appetite for future rate cuts.
GDP Data and Growth Concerns
This Thursday, February 12, the UK will release its quarterly GDP data. If the numbers come in weaker than expected, it will confirm the BoE’s cautious outlook and likely push GBP/USD lower. The pair has already shown a loss of momentum near the 1.3650 resistance level, suggesting a shift in sentiment.
Key Support Levels
Technically, GBP/USD is looking for a base. If it fails to hold the 1.3400 psychological level, we could see a deeper correction toward 1.3250. Traders should look for sell-on-rally opportunities near the 1.3550 resistance zone as long as the fundamental data remains soft.
AUD/JPY: The High-Volatility Cross
For traders looking for more aggressive moves, the AUD/JPY cross is currently one of the most interesting pairs. It has recently broken out to new 30-year highs, fueled by a divergence in central bank policies.
RBA’s Hawkish Stance
Unlike the BoE or the BoJ, the Reserve Bank of Australia (RBA) has recently hiked rates by 25 basis points to combat persistent inflation. This makes the AUD the strongest major currency in the market right now. When paired against a weak Yen, the result is a powerful and volatile uptrend.
Trading the Breakout
AUD/JPY is showing unusually high volatility, which is ideal for trend followers. The recent breakout suggests that any pullbacks to previous resistance-turned-support levels (near the 102.00–103.00 zone) could be seen as buying opportunities by institutional players.
EUR/USD: The Battle for 1.1800
The world’s most traded currency pair is currently in a state of indecision, caught between a long-term uptrend and short-term bearish pressure from a strong US dollar.
The Role of US Non-Farm Payrolls (NFP)
The January jobs report, delayed by the brief government shutdown, is finally scheduled for release this Wednesday, February 11. This is the “make or break” event for EUR/USD this week. A strong jobs report will likely push the pair below the 1.1750 support line, while a miss could fuel a rally back toward 1.2000.
Symmetrical Triangle Formation
On the daily chart, EUR/USD is forming a symmetrical triangle pattern. These patterns typically act as a “coiled spring,” leading to a massive move once a breakout occurs. Traders should wait for a daily close above 1.1920 or below 1.1700 before committing to a long-term direction.
Conclusion
This week requires a high degree of flexibility. The combination of political shifts in Japan and heavy-hitting data from the US means that volatility will be higher than average. Focus on the Yen crosses for trend opportunities and keep a close eye on the economic calendar for the Wednesday NFP release to navigate the major pairs successfully.
Weekly Watchlist Summary
| Currency Pair | Sentiment | Key Level to Watch | Major Driver |
| USD/JPY | Bullish | 155.00 (Resistance) | Japan Snap Election Results |
| GBP/USD | Bearish | 1.3400 (Support) | UK GDP Data (Thursday) |
| AUD/JPY | Strong Bullish | 103.50 (Support) | RBA Rate Hike vs. Weak Yen |
| EUR/USD | Neutral | 1.1800 (Pivot) | US NFP Jobs Report (Wednesday) |