Within the Eurozone, commentary from key policymakers has remained notably sparse, keeping short-term interest rate markets in a neutral holding pattern as no immediate policy shifts are anticipated. Recently, however, Gediminas Šimkus—ECB policymaker and Governor of the Bank of Lithuania—remarked that the balance of risks for both inflation and economic growth has increasingly tilted toward the downside.

These observations follow last month’s decision in which the European Central Bank held its benchmark interest rates steady for the fourth consecutive meeting. The Deposit Facility, Main Refinancing Operations, and Marginal Lending Facility rates remain at 2.00%, 2.15%, and 2.40% respectively, a move that fully aligned with market consensus. In its policy statement, the ECB Governing Council reaffirmed its commitment to the 2% medium-term inflation target via a data-dependent, meeting-by-meeting strategy. During the subsequent press conference, President Christine Lagarde clarified that the Council discussed neither rate hikes nor cuts, emphasizing a cautious stance. She noted that the bank cannot provide explicit forward guidance given the prevailing climate of global trade uncertainty. The upcoming Eurozone economic calendar is particularly dense: HCOB Composite and Services PMIs are due on Tuesday, followed by preliminary Core HICP data on Wednesday. Thursday will shift focus toward Consumer Confidence, Unemployment Rates, the Economic Sentiment Indicator, and the Producer Price Index (PPI).

On the geopolitical front, U.S. military forces captured Venezuelan President Nicolás Maduro and his wife, Cilia Flores, last weekend. Maduro faces serious allegations of drug trafficking and illicit associations with organizations such as the Sinaloa Cartel and the Tren de Aragua—both recently designated as foreign terrorist organizations by the White House. U.S. President Donald Trump has stated that the United States will "temporarily administer" Venezuela during this transition.

Simultaneously, U.S. domestic data reveals ongoing cracks in the industrial sector. The ISM Manufacturing PMI for December 2025 fell to 47.9, missing the 48.3 forecast and marking the tenth consecutive month of contraction. Despite this continued deterioration from November's 48.2, the index remains significantly above the 42.3 threshold historically associated with broader economic contraction.

Providing a central bank perspective, Minneapolis Fed President Neel Kashkari noted that inflation remains uncomfortably high, though he suggested that monetary policy is now approaching a neutral stance. He characterized the current labor market as a "low-hiring, low-firing" environment, indicating limited turnover rather than an outright collapse in employment.

The EUR/USD pair recently staged a modest relief rally after briefly touching the 1.1659 support zone. This upward impulse, however, found immediate resistance at 1.1726, a level that converges precisely with a local descending trendline currently under formation. The bearish reaction observed at this junction suggests that the broader corrective move has not yet concluded. The immediate downside objective returns to 1.1673, and a decisive breach of the 1.1659 local low could catalyze a fresh bearish leg toward deeper support.

From a moving average perspective, the 100-period and 200-period MAs are situated at 1.1734 and 1.1756 respectively. Notably, the 100-period MA is tracking the descending trendline, providing further technical validation for the current downtrend. Meanwhile, the Relative Strength Index (RSI) has climbed to the 62 level. Although it has not yet reached overbought territory, the RSI is notably higher than the levels seen during previous price peaks, creating a subtle bearish divergence. Given these technical conditions, short positions remain favored as the pair continues to respect the prevailing bearish trend.

Trading direction: Sell

Entry price: 1.1713

Target price: 1.1675

Stop loss: 1.1740

Validity: Jan 16, 2025 15:00:00

Geopolitical volatility spiked last weekend following reports that U.S. military forces captured Venezuelan President Nicolás Maduro and his wife, Cilia Flores. Maduro faces grave allegations involving drug trafficking and associations with major cartels, including the Sinaloa Cartel and the Tren de Aragua—both recently designated as foreign terrorist organizations by the White House. U.S. President Donald Trump announced that the U.S. will "temporarily administer" Venezuela. These dramatic events have intensified "risk-on" sentiment in specific currency corridors, driving a rapid appreciation of the British Pound as markets digest the regional implications.

Domestically, the Bank of England (BoE) has signaled that monetary policy will follow a gradual downward trajectory. This follows the December decision to cut the benchmark interest rate by 25 basis points to 3.75%. Market participants are currently pricing in at least one additional rate cut during the first half of the year, though the pace of easing is expected to remain measured. Investors believe this cautious approach is warranted by persistent inflationary pressures in the UK. While Consumer Price Index (CPI) inflation moderated to 3.2% in November from a September peak of 3.8%, it remains significantly above the 2% target, compelling the BoE to maintain a high level of vigilance.

On the Eurozone side, commentary from policymakers has been relatively scarce, leaving short-term rate markets in a neutral stance with no immediate policy shifts anticipated. Recently, ECB policymaker and Governor of the Bank of Lithuania, Gediminas Šimkus, observed that risks to both inflation and economic growth have increasingly tilted to the downside.

These observations come in the wake of last month's decision where the ECB held its key interest rates steady for the fourth consecutive meeting. The Deposit Facility remains at 2.00%, the Main Refinancing Operations rate at 2.15%, and the Marginal Lending Facility at 2.40%—a move perfectly aligned with market consensus. In its policy statement, the ECB Governing Council reaffirmed its commitment to the 2% medium-term inflation target via a data-dependent, meeting-by-meeting strategy.

During the post-meeting press conference, President Christine Lagarde clarified that neither rate hikes nor cuts were discussed, emphasizing that the bank remains cautious and cannot provide explicit forward guidance given the current climate of global trade uncertainty. Looking ahead, the economic calendar for the Eurozone is dense: the HCOB Composite and Services PMIs are due on Tuesday, followed by preliminary Core HICP data on Wednesday. Thursday will shift focus toward Consumer Confidence, Unemployment Rates, the Economic Sentiment Indicator, and the Producer Price Index (PPI).

The EUR/GBP pair has recently experienced significant bearish momentum after a decisive close below the 100-day Moving Average (MA), currently positioned at 0.8721. The price is now gravitating toward the 200-day Moving Average located at 0.8632. This level is of paramount importance as it converges with a long-term ascending trendline. This confluence zone will be the ultimate "make-or-break" area; a successful defense could trigger a sharp rebound, whereas a breakdown would open the door to a much deeper structural correction. The 0.8635 region stands as the primary horizontal support, aligning closely with the 200-day MA.

Furthermore, the Relative Strength Index (RSI) has reached 30.32 on the daily chart, firmly entering oversold territory. Traders are closely monitoring this area for potential long entries as reversal signals begin to accumulate. Notably, a prominent bullish divergence is forming on the RSI. While the price is testing deep support, it has yet to print a lower low relative to the price action seen on May 28th, when the RSI was significantly higher at 36. This suggests that bearish exhaustion is setting in, indicating that the downward force is dissipating and granting bulls a window to reclaim control of the price action.

Trading direction: Buy

Entry price: 0.8635

Target price: 0.8755

Stop loss: 0.8570

Validity: Jan 16, 2026 15:00:00

Safe-haven demand accelerated back into the precious metals market on Monday, with both gold and silver posting notable rebounds at the start of the week. After recently reaching record highs, prices of both metals remain in a phase of consolidation. This resilience reinforces the view that the broader upward trend remains intact, with the potential for fresh record highs later in the first quarter of 2026.

The trigger for the renewed surge in safe-haven demand was news that the United States captured Venezuelan President Nicolás Maduro over the weekend. Saturday’s action marked Washington’s most controversial intervention in the region since the invasion of Panama nearly four decades ago. The symbolic significance of the move has shaken expectations of regional stability, prompting investors to rotate back into assets viewed as protection against geopolitical shocks.

Gold is now facing increasingly intense volatility and speculative risk. Market participants note that as weekly price swings widen and implied lease rates rise, gold’s implied volatility has been quietly climbing.

The unprecedented turbulence seen across gold and other precious metals during the first trading week of 2026 serves as an important warning signal of heightened speculative activity. Driven by continued accumulation of physical bullion, retail investors have aggressively poured into gold and precious metals products, which may exacerbate liquidity tightness around the year-end and start of the new year. We maintain our upward revision to the gold price outlook and expect gold to reach 5000 USD per ounce as early as the end of the first quarter of 2026.

From a technical perspective, gold’s recent pullback from 4549 was slightly larger than expected, nearly touching 4273, which represents the 50% retracement of the move from 3997 to 4549. However, prices continue to find solid support above the 55-day moving average, currently located at 4172, keeping the long-term uptrend intact.

Once the current consolidation phase concludes, the long-term upward trend is expected to reassert itself. A decisive break above 4549 could open the way toward the 4685 area, near the 61.8% retracement of the 3997–4381 range. However, bearish divergence on the daily MACD suggests that strong resistance may emerge near this zone, potentially limiting the magnitude of the initial upside attempt.

From a short-term trading perspective, the preferred approach remains selling rallies and buying dips.

Trade Direction: Sell

Entry Price: 4470

Target Price: 4300

Stop Loss: 4532

Valid Until: January 20, 2026 23:55:00

Support: 4403 / 4375 / 4331

Resistance: 4472 / 4499 / 4527

As of early trading today, XAU/USD has surged over 2% to roughly $4,424/oz, marking a renewed push toward all-time highs driven by geopolitical tension and risk aversion. This surge comes after gold already ended 2025 at multi-year highs following a ~64% annual gain and record price action.

This jump reflects safe-haven demand in reaction to unexpected geopolitical events, which typically push gold higher in the short term. However, fundamentals behind gold’s recent rally including central bank purchases, hedge demand, and rate expectations are already intensely priced in, and the elevated price level sketches a backdrop where speculative longs may increasingly take profits. Forecasts from multiple analysts and models still show a long-term bullish bias, but intraday dynamics today can favor tactical downside moves as market participants react to extreme pricing and profit distribution.

On very short timeframes, sentiment is currently frayed and stretched. Although macro news supports gold structurally, M15 traders often react faster to exhaustion, sharp spikes, and illiquid conditions. After a strong gap up and quick climb into resistance zones ($4,420–$4,450), buyers risk becoming overextended on the intraday scale. The combination of extended price swings and rising open interest suggests that participants are accumulating positions at elevated valuations, which can lead to profit taking or stop-hunting near technical barriers.

Given this context, a tactical sell approach does not bet against the macro trend outright but rather on the short-term exhaustion within the intraday structure typical when markets spike quickly on headlines and begin to rotate as traders lock in profits or hedge risk.

On M15, price is extended near the upper Bollinger Band, reflecting the recent sharp rally. This is a classic regime where volatility expands upward and momentum becomes overbought. If the price begins to stall or pull back off the upper band, it often signals that the short-term push has lost steam, setting up a sell entry on a rebounding retracement back toward the BB middle line.

Ichimoku (9,26,52) on M15 shows price above the cloud with steep upward movement, but steep clouds with no consolidation often precede sharp pullbacks once momentum exhausts because there’s no equilibrium structure to absorb volatility. If price fails to re-establish above the cloud after a pullback, that indicates sellers controlling the short-term balance.

Stoch (5,3,3) is likely in an overbought region following the breakout move. A bearish crossover from high readings while price stalls under upper volatility can be a confirmation signal that short-term trend is temporarily cap-biased and due for a corrective move.

Entry: $4,435

Take Profit: $4,370

Stop Loss: $4,460

EUR/USD has struggled recently with downbeat macro drivers in early 2026 as the US dollar has strengthened on expectations of resilient US data and continued focus on the US policy outlook. Reuters reports the broader dollar rally has pressured major currencies, including EUR, ahead of key data releases such as US employment and eurozone inflation figures that could set the near-term trading tone.

Current spot levels around 1.168–1.1725 reflect this tug-of-war between short-term dollar strength and underlying euro support; price is holding above recent lows and range support, rather than collapsing lower, which suggests that sellers have not yet established control. Near-term upside bias hinges on whether the pair can reclaim the intraday equilibrium and attract renewed euro demand especially if European macro surprises to the upside or USD momentum cools into the US NFP week.

Sentiment on the M15 timeframe remains mixed to slightly bullish on dips, driven by the fact that EUR/USD has found value around the 1.1650–1.1680 region and has not broken structure to new lows. Technical commentators note that the pair has traded within a defined range and has repeatedly stalled downside moves, indicating some buying interest returning at key levels.

Market participants are now more cautious on selling rallies, choosing instead to pick favorable entry levels on pullbacks as broader fundamentals (Eurozone policy divergence, political risk positioning, and expectations around ECB cuts versus Fed bias) continue to underpin the euro’s relative resilience through contradictory dollar dynamics.

On M15, the price is testing the Bollinger mid-band (20,0,2) after dipping toward the session low near 1.1659–1.1660. If EUR/USD can find buyers and close above the mid-band with follow-through, it will signal that short-term control is shifting back to bulls. Additionally, price is currently above the lower band, suggesting volatility has not yet expanded decisively to the downside, leaving room for corrective rebound.

Using Ichimoku (9,26,52) on M15, EUR/USD is near dynamic support around the Kijun-sen and price is attempting to hold above this equilibrium. A sustained break above both the Kijun-sen and the cloud boundary will confirm that buyers have micro control and that the short-term balance zone is shifting upward.

Stoch (5,3,3) is emerging from oversold territory and showing signs of a bullish crossover a classic early signal in compressed ranges that often leads to price recovering toward mid-band and potential resistance confluence. If stochastic continues to rise while price closes above the mid-band, the short-term bias favors upside.

Key technical zones to watch:

Support: 1.1650–1.1670 (recent session lows and BB lower band)

Resistance: 1.1725–1.1750 (BB mid-band, short-term supply zone)

Entry: 1.1680–1.1700

Take Profit: 1.1750

Stop Loss: 1.1650

The euro began the new trading week on the back foot, extending the softness that defined the latter part of last week, as EUR/USD slipped to its weakest levels in nearly a month. At the time of writing, the pair was trading around 1.1690, reflecting sustained US dollar strength and a cautious market mood ahead of a dense calendar of high-impact US economic releases.

The move lower comes against a complex macro backdrop, where geopolitical headlines from Latin America intersect with monetary policy expectations and technical pressures that continue to favor the greenback.

Over the weekend, US forces captured Venezuelan President Nicolás Maduro, an event that has escalated tensions between Washington and Caracas to their highest level in years. Maduro is expected to appear in a US court later on Monday, while US President Donald Trump has openly warned that further military action against Venezuela remains on the table. The White House has framed its actions as part of a broader strategy to curb drug trafficking and force open Venezuela’s oil sector to international — and particularly US — participation.

Despite the dramatic nature of these developments, global financial markets have so far reacted with notable restraint. Asian equity indices started the week firmly in positive territory, and European stock futures are pointing to a mildly higher open. The lack of risk aversion suggests that investors currently view the Venezuela situation as geopolitically contained, with limited near-term spillover into global growth or financial stability.

In foreign exchange markets, however, the dominant narrative remains US dollar strength rather than geopolitical risk. The dollar’s upward momentum, which gathered pace late last week, has carried into Monday, underpinned by resilient US economic data and a recalibration of expectations around Federal Reserve policy.

Recent US releases, including strong home sales figures and better-than-expected Jobless Claims, have reinforced the view that the US economy is slowing only gradually. This data flow has strengthened the Federal Reserve’s argument for a measured and cautious easing cycle, rather than an aggressive pivot toward rate cuts. As a result, US yields have remained relatively supported, keeping the dollar attractive against lower-yielding peers such as the euro.

Attention now turns to the ISM Manufacturing PMI, due later on Monday, which will offer fresh insight into the health of the US industrial sector. While markets expect only modest improvement, any upside surprise could further cement the dollar’s advantage. The true focal point of the week, however, will be December’s Nonfarm Payrolls report on Friday, a release that has the potential to significantly reshape expectations for US monetary policy in early 2026.

For the euro, the broader macro picture remains challenging. Eurozone growth indicators continue to lag their US counterparts, and the European Central Bank has shown increasing sensitivity to downside risks, particularly as tighter financial conditions weigh on manufacturing and investment. This policy divergence — even if subtle — continues to favor EUR/USD downside over the near term.

From a technical perspective, EUR/USD is firmly entrenched in a corrective phase. The pair has extended its pullback from 1.1800 highs to below the 1.1700 handle, carving out fresh four-week lows and reinforcing a bearish short-term structure.

Momentum indicators paint a clear picture of downside pressure. On the four-hour chart, the Relative Strength Index (RSI) is hovering near 30, signaling oversold conditions but also underscoring the strength of the current bearish trend rather than an imminent reversal. Meanwhile, the Moving Average Convergence Divergence (MACD) continues to print red histogram bars, confirming negative momentum and the absence of bullish conviction.

Immediate support has emerged around the 1.1670 region, but price action so far suggests that buyers lack the strength to engineer a meaningful rebound. A decisive break below this level would expose the 50% Fibonacci retracement of the November–December rally at 1.1650, a zone that could offer temporary stabilization.

Below there, downside risks deepen toward the 1.1500 area, where the December 8 and 9 lows converge with the 61.8% Fibonacci retracement of the same upward cycle. A move into that region would mark a more profound technical deterioration and potentially shift the medium-term outlook more decisively in favor of the dollar.

SELL EURUSD

ENTRY PRICE: 1.1660

STOP LOSS: 1.1800

TAKE PROFIT: 1.1500