Crossing Above 4600! Gold Retreats but Still Has New Highs Ahead

Forex

Commodity

Summary:

Influenced by uncertainties and geopolitical risks, gold prices retreated after hitting a historic high of $4,630 per ounce in the previous trading session, then continued their upward trend. The U.S. December Consumer Price Index (CPI) inflation data, to be released later on Tuesday, will be the market's focus.

SELL XAUUSD

EXP

TRADING

4582.97

Entry Price

4300.00

4700.00

4614.89 +28.79 +0.63%

0.0

Pips

Flat

4300.00

Exit Price

4582.97

Entry Price

4700.00

Fundamentals

Tensions between Iran and the United States may boost prices of traditional safe-haven assets like gold. U.S. President Trump threatened retaliation if Iranian authorities target civilians, while Tehran warned the U.S. and Israel against any intervention. On Monday, Trump announced that any country trading with Iran will face a 25% tariff on all its trade with the U.S. Traders are closely watching the U.S. CPI data due on Tuesday, with both overall and core CPI for December expected to rise 2.7% year-on-year. Any sign of rising U.S. inflation could strengthen the dollar and pressure dollar-denominated commodity prices in the short term. Holdings of SPDR Gold Trust, the world's largest gold ETF, increased by 6.24 tons from the previous day to 1,070.8 tons. Meanwhile, CME Group announced that starting after the close on January 13th, it will adjust margin calculation methods for precious metals futures (including gold and silver), shifting from fixed amounts to a percentage of contract notional value, approximately 5% for gold contracts and 9% for silver. This adjustment may affect leverage costs for some investors but also reflects the exchange's management of market volatility expectations.

During a speech on Sunday, Federal Reserve Chair Jerome Powell said he is under criminal investigation, sparking an independence crisis and triggering risk-off sentiment in global markets. Powell stated that the U.S. Department of Justice has issued a grand jury subpoena to the Fed and threatened criminal charges over his June 2025 testimony to the Senate Banking Committee regarding the $2.5 billion renovation of the Fed's Washington, D.C. headquarters. He called these threats "pretexts" aimed at pressuring the Fed to cut interest rates. Market concerns suggest that if the Fed's independence erodes, it could weaken its credibility in fighting inflation, potentially pushing long-term inflation expectations higher and structurally pressuring the dollar's value. In turn, this outlook has failed to attract meaningful buyers for the dollar, further supporting gold prices. However, gold bulls are waiting for the latest U.S. consumer inflation data. The closely watched U.S. nonfarm payrolls report released last Friday supported the view that policy may remain on hold in the first quarter. Yet traders still expect the Fed to cut rates twice later this year.

Technical Analysis

Regarding the 4-hour chart, gold's Bollinger Bands are opening upwards, with moving averages diverging upward. After breaking above the Bollinger Upper Band, prices faced resistance and may pull back to around the EMA12 and Bollinger Middle Band at 4,562 and 4,503, respectively. If they stabilize, there is a high probability of another breakout above 4,630 and 4,650. RSI is at 72, indicating a dominant buy-side market. Meanwhile, the daily chart indicates that prices are oscillating upward along the Bollinger Upper Band and EMA12. MACD momentum weakens somewhat, but as long as prices do not fall below EMA12, the uptrend remains intact. Resistance lies near previous highs and round numbers at approximately 4,630 and 4,700. RSI is at 69, reflecting strong buying sentiment. It is better to sell now and buy later.

Crossing Above 4600! Gold Retreats but Still Has New Highs Ahead_1

Crossing Above 4600! Gold Retreats but Still Has New Highs Ahead_2

Trading Recommendations

Trade Direction: Sell

Entry Price: 4581

Target Price: 4300

Stop Loss: 4700

Support: 4500/4200/4100

Resistance: 4630/4650/5000

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Manuel

Forex

Economic

Summary:

This suggests that the recent bearish correction is rapidly losing velocity, potentially allowing buyers to reclaim control of the price action.

BUY USDCHF

EXP

PENDING

0.79650

Entry Price

0.80760

0.79400

0.80154 +0.00064 +0.08%

Pips

PENDING

0.79400

Exit Price

0.79650

Entry Price

0.80760

Geopolitical tensions have intensified as U.S. President Donald Trump issued a stern warning, stating that the United States would respond with decisive force should Iranian authorities employ lethal measures against protesters. This rhetoric was further amplified by the administration's announcement that any nation engaging in trade with Iran will face an immediate 25% tariff on all business conducted with the United States. These developments have injected a significant layer of risk-off sentiment into global markets as investors weigh the potential for trade disruptions.

On the domestic front, a recent New York Times headline revealed that federal prosecutors have allegedly initiated an investigation into Federal Reserve Chair Jerome Powell. In a direct response, Powell released a video statement clarifying that these legal threats are unrelated to his past congressional testimonies or administrative duties. Instead, he characterized the allegations as "pretexts" from the Trump administration, asserting that the prospect of criminal charges is a direct result of the Federal Reserve maintaining its independence and setting interest rates based on economic data rather than political preference.

Regarding economic indicators, the U.S. Bureau of Labor Statistics reported that Nonfarm Payrolls added 50,000 jobs in December, missing the 60,000 forecast. However, the Unemployment Rate unexpectedly declined to 4.4% from 4.6%, tempering fears of a major labor market contraction. Simultaneously, the University of Michigan Consumer Sentiment Index rose to 54 in January, exceeding expectations. Nevertheless, the Fed remains concerned about inflation expectations, which ticked up to 3.4% on a five-year horizon, signaling that the fight against price pressures remains a priority.

In Switzerland, the latest inflation figures have provided the Swiss National Bank (SNB) with breathing room. The Consumer Price Index (CPI) remained unchanged month-over-month in December, a recovery from the previous contraction. On an annual basis, inflation stands at 0.1%, aligning with central bank projections. SNB meeting minutes confirm a cautious stance, with officials seeing no immediate necessity to shift interest rates into negative territory, citing potential risks to the financial system while noting a gradual improvement in the broader economic outlook. Bulls Eye Strategic Rebound From Key Horizontal Support Confluence_1

Bulls Eye Strategic Rebound From Key Horizontal Support Confluence_1

Technical Analysis

The USD/CHF pair continues to trade within a dominant bullish structure. After reaching a local peak of 0.8017 in the previous session, the pair entered a corrective phase, descending toward the 0.7955 region. This zone is strategically significant as it lies in close proximity to the 100-period Moving Average, currently positioned at 0.7948.

This area is expected to serve as a technical "launchpad" for the next leg up. The current floor coincides with a historical resistance-turned-support level; if the price confirms this S/R flip, it would provide a strong technical foundation for a renewed upward impulse.

From a momentum perspective, the Relative Strength Index (RSI) has dipped to a local low of 36, nearing oversold territory. Notably, this is the lowest RSI reading within the current bullish cycle, creating visible bullish divergences as the indicator shows exhaustion even against higher price levels. This suggests that the recent bearish correction is rapidly losing velocity, potentially allowing buyers to reclaim control of the price action.

The primary upside objective for this anticipated move is the 0.8075 resistance zone, a significant local ceiling. However, traders should remain vigilant: a failure to hold the 0.7948 support would invalidate the immediate bullish setup and likely lead to a deeper retracement toward the next major demand zone.

Trading Recommendations

Trading direction: Buy

Entry price: 0.7965

Target price: 0.8076

Stop loss: 0.7940

Validity: Jan 23, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Forex

Economic

Summary:

A significant technical shift has occurred as the 200-period Moving Average, which previously functioned as a reliable support floor, is now acting as a resistance ceiling.

SELL EURUSD

EXP

TRADING

1.16643

Entry Price

1.16050

1.17050

1.16378 -0.00041 -0.04%

0.0

Pips

Flat

1.16050

Exit Price

1.16643

Entry Price

1.17050

Economic sentiment within the Eurozone has shown notable signs of recovery, according to the latest Sentix Investor Confidence Index, which improved to -1.8 in January from -6.2 in December. This represents the strongest performance since July of last year and highlights a significant shift in institutional investor optimism regarding the region's economic trajectory. Although this data underscores a renewed sense of confidence, its immediate impact on the Euro's exchange rate has remained relatively contained.

Eurozone inflation has stabilized near the European Central Bank (ECB) target, reinforcing the prevailing consensus among policymakers that interest rates should remain at their current levels unless the economic outlook shifts dramatically. ECB Vice President Luis de Guindos stated on Thursday that current rates are appropriate, though he cautioned that "enormous uncertainty" persists due to heightened geopolitical risks. Supporting this cautious optimism, consumer consumption rose by 0.2% month-over-month in November, surpassing estimates. Conversely, German economic data remains mixed; while Industrial Production exceeded forecasts, the trade balance narrowed as exports experienced a decline.

In the United States, the political landscape has become increasingly volatile. A headline in the New York Times recently reported that federal prosecutors have allegedly opened an investigation into Federal Reserve Chair Jerome Powell. In response, Powell released a video statement asserting that the threat is not related to his past testimonies or internal administrative matters. He characterized the allegations as "pretexts" from the Trump administration, stating that the threat of criminal charges is a direct consequence of the Federal Reserve setting interest rates based on public service rather than presidential preference.

On the data front, the U.S. Bureau of Labor Statistics revealed that Nonfarm Payrolls added 50,000 jobs in December, falling short of the 60,000 forecast. Despite the slower hiring, the Unemployment Rate dropped to 4.4% from 4.6%, effectively easing concerns regarding a rapid deterioration of the labor market. Furthermore, the University of Michigan Consumer Sentiment Index rose to 54 in January, beating expectations. However, inflation expectations remain a concern, with five-year expectations ticking up to 3.4%, indicating that the Fed’s battle against price pressures is far from over. Key Moving Average Rejection Points Toward Potential EURUSD Downside Extension_1

Key Moving Average Rejection Points Toward Potential EURUSD Downside Extension_1

Technical Analysis

The EUR/USD pair has consistently failed to establish a new "higher high," a clear technical signal that the bearish trend remains the dominant market force. This downward structure originated on December 23rd, when the pair reached a peak of 1.1809 before entering a sustained corrective phase.

A significant technical shift has occurred as the 200-period Moving Average, which previously functioned as a reliable support floor, is now acting as a resistance ceiling. This "support-turned-resistance" flip suggests that a new bearish impulse is likely underway. The primary downside objective is currently set at the 1.1604 horizontal support level—a zone where the price has found buyers in the past and could potentially trigger a temporary bounce.

From a momentum perspective, the Relative Strength Index (RSI) has reached the 57 level. While this is not yet in overbought territory, a notable divergence/convergence is forming: the RSI is hitting higher levels than its previous peaks while the price itself fails to move higher. This often indicates that bullish momentum is exhausting rapidly, allowing bears to reclaim control.

Traders should monitor the 1.1700 level closely. A decisive breakout and close above this resistance zone would effectively invalidate the current bearish setup, potentially opening the door for a more prolonged bullish recovery toward the 1.1750 region.

Trading Recommendations

Trading direction: Sell

Entry price: 1.1665

Target price: 1.1605

Stop loss: 1.1705

Validity: Jan 23, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Summary:

The DOJ investigation into Fed Chair Powell has triggered continued safe-haven demand, pushing gold to fresh record highs. The long-term outlook for gold remains constructive, but with prices at elevated levels, short-term pullback risk has also increased.

SELL XAUUSD

Close Time

CLOSED

4627.52

Entry Price

4395.00

4678.00

4614.89 +28.79 +0.63%

318.1

Pips

Profit

4395.00

4595.71

Exit Price

4627.52

Entry Price

4678.00

Fundamentals

Driven by a market reassessment of political risks surrounding the White House and the Fed, gold opened sharply higher on Monday and hit a new record, with silver following. Gold looks set to test the key level at 4,685; a decisive break above that point could pave the way toward the 5,000 psychological level.

In addition, after a year in which silver led the market, momentum may be rotating back into gold — a shift consistent with rising concerns about institutional credibility rather than cyclical inflation.

The immediate trigger was news that US prosecutors opened a criminal inquiry into Fed Chair Jerome Powell on Friday. The development rattled markets and reignited concerns about growing political interference with the Fed at a time when policy credibility remains critical.

The move is widely seen as the latest attack by the Trump administration on the Fed. While policymakers remain concerned about rekindling price pressures or undoing hard-won disinflation, the Fed is under increasing pressure to move toward easier policy.

Powell confirmed on Sunday that the Fed had received a grand-jury subpoena and the prospect of criminal charges. The matter relates to his earlier testimony to Congress regarding a $2.5 billion renovation at Fed headquarters, but Powell placed the issue in a broader political context.

He warned that the action should be seen against a backdrop of ongoing threats and pressure intended to force rate cuts and increase political control over monetary policy. He stated bluntly: “This unprecedented action should be viewed in the broader context of ongoing threats and sustained pressure.” Powell’s prior remarks have indicated the Fed’s readiness to defend its independence.

For markets, Fed easing expectations, continued ETF inflows, and robust physical demand together underpin the long-term bullish case for gold. However, in the near term, given that prices are at record highs, investors should remain constructive but cautious and prepare for heightened volatility.

Where to Next After a Fresh All-Time High?_1

Technical Analysis

Technically, the upward trend in gold resumed after breaking the previous record high of 4,550, and it is now moving toward 4,685, which corresponds to the 61.8% retracement of the 3,267–4,381 range. A clear break above that level could allow a run at the 5,000 psychological mark and even 5,111, the 100% retracement.

Conversely, as long as the 4,381 resistance (now turned support) holds, the outlook remains bullish even if a pullback occurs.

Trade Recommendations

Trade Direction: Sell

Entry Price: 4,635

Target Price: 4,395

Stop Loss: 4,678

Valid Until: February 9, 2026 23:55:00

Support: 4,550 / 4,518 / 4,485

Resistance: 4,632 / 4,655 / 4,685

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

Silver extends a powerful rally toward record highs as geopolitical tensions, US political uncertainty, and expectations of Fed rate cuts fuel safe-haven demand.

BUY XAGUSD

Close Time

CLOSED

84.508

Entry Price

91.000

82.000

89.103 +2.198 +2.53%

102.4

Pips

Profit

82.000

85.532

Exit Price

84.508

Entry Price

91.000

Silver (XAG/USD) continued its explosive advance on Monday, trading around $85.40 at the time of writing, marking a 7.0% gain on the day. The precious metal is holding firmly onto the bulk of its intraday gains, edging closer to its all-time high of $58.87, as investors intensify their rotation into safe-haven assets amid a rapidly deteriorating global risk backdrop.

The latest surge in Silver is not occurring in isolation. It forms part of a broader rally across the precious metals complex, with Gold (XAU/USD) also extending gains as investors reassess geopolitical, political, and macroeconomic risks. The current environment reflects a sharp shift away from risk-sensitive assets, with capital increasingly flowing into stores of value as uncertainty dominates the global outlook.

At the heart of the risk-off move are escalating geopolitical tensions in the Middle East, particularly surrounding Iran, where ongoing unrest and an increasingly hostile exchange of rhetoric between Tehran and Washington have amplified fears of a broader regional confrontation. Markets remain highly sensitive to any developments that could disrupt energy flows or trigger military escalation, conditions that historically provide strong tailwinds for precious metals.

Beyond the Middle East, concerns are also mounting over Arctic security, following discussions among European leaders regarding a strengthened military presence in Greenland. While often overlooked, the Arctic has emerged as a strategic flashpoint, with its geopolitical significance growing alongside climate-driven accessibility and global power competition. The combination of Middle Eastern instability and rising Arctic militarization has added another layer of uncertainty, further undermining global risk sentiment.

Compounding these external shocks is an unprecedented political situation in the United States. Confidence in the country’s monetary framework has been rattled by the launch of a criminal investigation targeting Federal Reserve Chair Jerome Powell. The move has reignited concerns over the politicization of US monetary policy, eroding institutional credibility at a time when market confidence is already fragile.

This development has weighed heavily on the US Dollar, which typically shares an inverse relationship with Dollar-denominated commodities. As trust in the Federal Reserve’s independence weakens, the Dollar’s safe-haven appeal diminishes—creating a supportive backdrop for Silver and other hard assets.

From a macroeconomic perspective, recent US labor market data have reinforced expectations that the economy is losing momentum. Job creation fell short of market forecasts, signaling a gradual cooling in employment conditions. In response, markets continue to price in two Federal Reserve rate cuts later this year, even as policymakers are widely expected to keep rates unchanged at the upcoming January meeting.

Lower interest rates reduce the opportunity cost of holding non-yielding assets such as Silver, structurally underpinning demand. In this context, Silver’s rally appears to be driven not only by short-term fear but also by a longer-term repricing of monetary conditions.

Looking ahead, investors will closely monitor upcoming US economic data, including Consumer Price Index (CPI), Retail Sales, and Producer Price Index (PPI) figures, alongside speeches from Federal Reserve officials. Any confirmation of slowing inflation or a dovish shift in policy rhetoric could further accelerate Silver’s upside, especially given the already fragile geopolitical and political landscape.

Technical Analysis

From a technical standpoint, Silver has posted sharp intraday gains, carving out new all-time highs and confirming the dominance of the short-term bullish trend. Prices continue to trade decisively above the EMA50, reinforcing trend stability and signaling strong underlying momentum.

Silver’s price action remains aligned with its ascending trendline, while relative strength indicators continue to flash positive signals despite operating in overbought territory—a characteristic often seen during strong directional trends rather than a sign of imminent reversal.

Importantly, Silver is now positioned to violate a major resistance structure aligned with its current all-time high. A confirmed four-hour close above this level would validate a technical breakout and open the door for further upside acceleration.

Should this breakout materialize, the next bullish extension is projected toward an initial upside target near 91.00, with momentum-driven flows likely to dominate price action in the absence of nearby technical resistance.

TRADE RECOMMENDATION

BUY SILVER

ENTRYR PRICE: 84.50

STOP LOSS: 82.00

TAKE PROFIT: 91.00

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

Gold (XAU/USD) surged to historic highs above $4,600 on Monday, driven by deepening concerns about U.S. Federal Reserve independence, a softer U.S. dollar, and escalating geopolitical tensions — with investors flocking to safe-haven assets as risk sentiment deteriorates.

BUY XAUUSD

EXP

TRADING

4610.00

Entry Price

4700.00

4560.00

4614.89 +28.79 +0.63%

0.0

Pips

Flat

4560.00

Exit Price

4610.00

Entry Price

4700.00

Gold prices launched the new trading week with explosive upside momentum, shattering the long-watched $4,600 psychological threshold and printing fresh all-time highs as investor anxiety surged across global markets. Spot gold (XAU/USD) was last seen trading around $4,610, up nearly 2.1% on the day, as capital rotated aggressively into safe-haven assets amid intensifying political and economic uncertainty.

The rally comes against the backdrop of an extraordinary development in the United States, where federal prosecutors have initiated a criminal investigation involving Federal Reserve Chair Jerome Powell. The move has rattled markets, triggering a sharp reassessment of U.S. institutional stability and reigniting concerns about the erosion of central bank independence — a foundational pillar of global financial confidence.

Political pressure on the Federal Reserve has surged in recent weeks, with mounting criticism over interest-rate policy, inflation management, and the broader direction of monetary strategy. The investigation into Powell, regardless of its ultimate outcome, has injected a new layer of risk into markets already grappling with slowing global growth and fragile investor sentiment. For many traders, the optics alone are enough to undermine confidence in the U.S. policy framework, pushing investors toward assets perceived as politically neutral and historically reliable stores of value — chief among them, gold.

The fallout has been swift in currency markets. The U.S. dollar has come under renewed selling pressure, reflecting investor unease over policy credibility and the potential for politicized monetary decisions. As the greenback weakens, gold — priced in dollars — becomes more attractive to international buyers, reinforcing the metal’s upside momentum.

This dynamic has been compounded by a broader shift toward risk aversion, with equity markets showing signs of strain and volatility creeping higher. In such environments, gold’s role as both an inflation hedge and a hedge against systemic risk becomes increasingly prominent, especially when confidence in traditional financial anchors begins to falter.

Beyond domestic U.S. concerns, persistent geopolitical tensions are adding fuel to gold’s surge. Investors remain on edge as protests continue across Iran, raising fears of wider regional instability. At the same time, renewed rhetoric involving U.S. strategic interests in Greenland and ongoing uncertainty surrounding Venezuela have kept geopolitical risk premiums firmly embedded in asset prices.

These overlapping flashpoints are reinforcing a global narrative of fragmentation and unpredictability — conditions that historically favor bullion. In this environment, gold is no longer merely reacting to interest-rate expectations but is increasingly being treated as strategic insurance against political, economic, and geopolitical shocks.

Looking ahead, markets are bracing for a pivotal week of U.S. economic data. Consumer Price Index (CPI) figures due Tuesday will offer critical insight into inflation trends, followed by Retail Sales and Producer Price Index (PPI) data on Wednesday. Together, these releases will shape expectations around the Fed’s next policy steps at a time when its credibility is already under scrutiny.

Adding to the volatility, a heavy lineup of Federal Reserve speakers is scheduled throughout the week. Any deviation in tone — particularly regarding inflation persistence or rate-cut timing — could further exacerbate market swings and influence gold’s trajectory.

Technical Analysis

From a technical standpoint, gold’s structure remains decisively bullish. The metal’s successful breach and consolidation above $4,600 confirms a continuation of the dominant upward trend on the short-term and medium-term charts. Prices remain supported by an ascending trend line and continue to trade comfortably above the 50-period Exponential Moving Average (EMA50), reinforcing the strength of the move.

Momentum indicators are flashing strong bullish signals. The Average Directional Index (ADX) hovering near 30 suggests that trend strength remains intact, while relative strength indicators, though firmly in overbought territory, show no immediate signs of bearish divergence. This reflects powerful buying pressure rather than exhaustion.

On the upside, a sustained push above $4,650 could open the door toward the $4,700 region, where psychological and technical resistance is expected to emerge. While near-term consolidation or shallow pullbacks cannot be ruled out given stretched conditions, dips are likely to attract buyers as long as broader risk drivers remain unresolved.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 4610

STOP LOSS: 4560

TAKE PROFIT: 4700

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Traders' Opinions

Summary:

EUR/USD rebounded toward 1.1690 as Eurozone sentiment improved and renewed political pressure on the Fed weakened the dollar, with markets now focused on US CPI and Fed commentary for direction.

BUY EURUSD

Close Time

CLOSED

1.16899

Entry Price

1.17400

1.16500

1.16378 -0.00041 -0.04%

39.9

Pips

Loss

1.16500

Exit Price

1.16899

Entry Price

1.17400

The euro extended its recovery against the US dollar on Monday, with EUR/USD trading near the 1.1690 mark at the time of writing, around 0.4% higher on the day. The pair rebounded sharply from one-month lows around the 1.1620 region earlier in the session, as a combination of improving Eurozone sentiment data and renewed political pressure on the US Federal Reserve weighed heavily on the greenback.

Support for the single currency was reinforced by an upbeat reading from the Eurozone Sentix Consumer Sentiment Index, which surprised modestly to the upside and helped ease concerns that fragile consumer confidence could further undermine the region’s already sluggish growth outlook. While the broader Eurozone macro picture remains mixed, the data provided a timely catalyst for euro buyers, particularly against a dollar struggling to find a fundamental anchor.

The US dollar, meanwhile, came under renewed selling pressure following fresh political developments in Washington that have unsettled investors and revived concerns over the Federal Reserve’s independence. According to a report published by The New York Times on Sunday, Federal Reserve Chairman Jerome Powell is facing a criminal investigation linked to testimony he delivered before the Senate Banking Committee regarding the renovation of a Federal Reserve building.

Powell responded swiftly, releasing a video statement in which he described the investigation as “unprecedented” and framed it as part of a broader campaign of political intimidation aimed at forcing the central bank to cut interest rates. Markets appeared to interpret the episode as another escalation in the long-running conflict between the US administration and the Fed, raising fears that political interference could undermine policy credibility at a critical juncture for the US economy.

From a market perspective, renewed attacks on the Fed have tended to weaken the dollar, as they inject uncertainty into the outlook for US monetary policy and risk destabilising long-term inflation expectations. Traders appear increasingly wary that sustained political pressure could influence the Fed’s decision-making process, particularly as financial conditions remain tight and growth signals show early signs of cooling.

Geopolitical risks also linger in the background, adding another layer of complexity to market sentiment. Violence escalated sharply in Iran over the weekend, with reports suggesting that hundreds of protesters were killed by the regime amid widespread unrest. The situation has heightened concerns about regional instability, while the looming threat of potential US intervention has added to global risk unease. Although such developments have traditionally supported the US dollar via safe-haven flows, the currency has so far failed to benefit, suggesting that domestic political concerns are currently exerting a stronger influence.

The economic calendar is relatively light at the start of the week, but market participants will be paying close attention to remarks from Atlanta Fed President Raphael Bostic later on Monday. Any commentary on inflation dynamics or the timing of potential rate cuts could shape near-term dollar sentiment. Looking further ahead, attention will turn sharply to the release of US Consumer Price Index (CPI) data on Tuesday, a key input into the Fed’s policy calculus, followed by a series of speeches from Fed officials throughout the week.

In my view, the dollar’s near-term vulnerability reflects a growing disconnect between resilient headline US data and rising political and institutional risks. Unless US inflation surprises meaningfully to the upside, the greenback may struggle to regain momentum, leaving room for the euro to extend its corrective rebound despite its own structural challenges.

Technical Analysis

From a technical standpoint, EUR/USD has staged a convincing bounce from one-month lows near 1.1620, suggesting that buyers are defending the lower boundary of the recent trading range. However, the pair continues to trade within a broader descending channel that has been in place since the late-December highs, indicating that the medium-term bias remains cautiously bearish unless key resistance levels are cleared.

Momentum indicators on the four-hour chart have turned more constructive. The Moving Average Convergence Divergence (MACD) has crossed above its signal line, pointing to a gradual fading of bearish pressure, while the Relative Strength Index (RSI) has pushed decisively above the 50 threshold, signalling improving upside momentum.

On the topside, the immediate area of interest lies near 1.1700, where the upper boundary of the descending channel converges with the January 7 high. A sustained break above this zone would likely open the door for a move toward the January 6 peak at 1.1740. Failure to clear resistance, however, could see the pair drift back toward support levels, with 1.1620 remaining a critical line in the sand for euro bulls.