Oil markets experienced a sharp rebound this week, with Brent crude approaching mid‑$60 levels as traders factored in heightened geopolitical risk and potential supply disruptions. The benchmark North Sea crude, which had lingered below $60 per barrel for several weeks amid ongoing oversupply concerns, surged amid reports of intensifying civil unrest in Iran and mounting pressure from U.S. tariffs on countries trading with Tehran. West Texas Intermediate similarly posted gains above $60, signaling a broader improvement in market sentiment fueled more by political tension than by immediate physical supply constraints.

The primary catalyst for the recent rally is unrest in Iran, where protests have escalated amid worsening economic conditions and government crackdowns. Market participants have increasingly priced in the possibility that Iranian crude production, which represents roughly 3.3 to 3.5 million barrels per day, could be disrupted. Compounding these fears, President Trump announced a 25 percent tariff on goods from countries that continue to engage in trade with Iran, further clouding the outlook for Iranian exports. Traders have interpreted this move as an additional obstacle to Tehran’s already constrained crude flows, creating a risk premium for barrels potentially unable to reach international markets.

While the tariffs and unrest have driven immediate concerns, underlying structural factors continue to influence the market. Venezuelan exports, previously curtailed by sanctions, have begun to trickle back into the global market, providing some relief against sharply higher prices. Meanwhile, OPEC+ has maintained a cautious approach to production increases, pausing quota hikes despite the price rally. This strategy has established a soft floor for Brent in the high-$50s and low-$60s, supporting the current market levels even as demand growth remains modest. Nonetheless, the underlying oversupply that persisted through late 2025 continues to impose a ceiling on any dramatic price surge.

Technically, Brent crude has recently broken above a long-standing downtrend channel, a development that suggests a shift in market structure from bearish consolidation toward a more bullish accumulation phase. Following this breakout, the market has seen a moderate pullback, which traders interpret as a healthy retracement rather than a reversal. As long as prices remain above the breakout zone, the expectation is that buyers will re-enter the market, potentially sustaining an upward trajectory in the short to medium term. The combination of a confirmed breakout and a controlled retracement indicates that the market is digesting gains before potentially pushing toward higher levels, reflecting both technical strength and sensitivity to geopolitical developments.

From a trading perspective, the market currently favors long positions on retracements that are accompanied by bullish confirmation, such as renewed momentum above key short-term moving averages or sustained trading volumes. The immediate technical resistance lies near $63.74 per barrel, while the near-term upside could extend toward $70 if the geopolitical risk premium persists and Iran-related supply concerns intensify.

BUY WTI

ENTRY PRICE: 61.45

STOP LOSS: 57.50

TAKE PROFIT: 70.00

Silver (XAG/USD) continued its relentless ascent on Wednesday, extending gains for a fourth consecutive session and trading around the $90.50 level at the time of writing, up roughly 4.3% on the day. The move marks a new all-time high for the white metal and underscores the strength of a rally that is increasingly being fueled by a rare convergence of geopolitical stress, institutional uncertainty, and supportive monetary expectations.

The latest leg higher comes as global risk sentiment remains fragile. Investor demand for safe-haven assets has been reignited by intensifying geopolitical tensions in Iran, where widespread protests linked to soaring inflation, the sharp depreciation of the Iranian rial, and allegations of entrenched government corruption have placed authorities under severe pressure. According to human rights organizations, the government’s response has been increasingly violent, with reports of hundreds of deaths following a crackdown on demonstrators. This escalation has heightened risk aversion across global financial markets.

Adding to the unease, US President Donald Trump has warned that military options could be considered should the repression continue, injecting a further layer of geopolitical uncertainty into an already fragile environment. Historically, such periods of heightened geopolitical risk tend to favor precious metals, and silver has been a prime beneficiary, outperforming many traditional defensive assets.

Beyond geopolitics, silver is also drawing support from growing concerns surrounding institutional stability in the United States. Markets have been rattled by fears over the independence of the Federal Reserve following the launch of criminal charges against Fed Chair Jerome Powell related to the management of funds allocated for the renovation of the central bank’s headquarters in Washington. Powell has strongly rejected the accusations, describing them as politically motivated and warning that they could be used as leverage to influence monetary policy decisions.

Initially, these developments weighed heavily on the US Dollar, as investors questioned whether an erosion of central bank independence could undermine the credibility of US financial institutions and, in a more extreme scenario, threaten the country’s sovereign credit standing. While the greenback has since shown tentative signs of stabilization—helped by vocal support for Powell from major global central banks, including the European Central Bank and the Bank of England—the broader environment remains constructive for precious metals.

At the same time, expectations that the Federal Reserve will eventually be forced to cut interest rates continue to underpin silver prices. With real yields projected to decline and the US Dollar still facing structural headwinds, non-yielding assets such as silver remain highly attractive. This macro backdrop is reinforced by ongoing tightness in the physical silver market, where robust industrial and investment demand continues to limit supply flexibility.

From a technical perspective, silver has shown some intraday fluctuations as it attempts to consolidate recent gains and alleviate increasingly overbought conditions. Momentum indicators, particularly the Relative Strength Index, suggest the market is stretched, with early signs of negative overlapping signals emerging. However, these appear corrective rather than trend-changing.

Prices continue to trade comfortably above the 50-period exponential moving average (EMA50), reinforcing the dominance and stability of the prevailing bullish trend on a short-term basis. As long as silver holds above key support levels, the broader technical structure remains constructive. In my view, any near-term pullbacks are likely to be viewed as buying opportunities rather than a signal of trend exhaustion.

With macro risks unresolved, institutional confidence under scrutiny, and monetary conditions tilting in favor of hard assets, silver’s rally appears fundamentally supported. If current dynamics persist, the psychologically significant $100 level is no longer a distant target but a plausible medium-term objective for the market.

BUY SILVER

ENTRY PRICE: 91.90

STOP LOSS: 86.00

TAKE PROFIT: 100.00

On Japan's side, reports that Prime Minister Sanae Takaichi may push for an early general election have sparked significant concerns about fiscal and debt prospects. Media outlets noted that Takaichi could dissolve the House of Representatives shortly after the regular Diet session opens and hold a general election in February, which would force a rapid recess of parliament, delaying deliberations on the national budget and key legislation. Under current law, the Japanese government is generally prohibited from issuing bonds at will, relying for years on ad-hoc legislation to issue "deficit-covering debt" as exceptions to fill fiscal gaps. However, the existing authorization for such debts expires at the end of the current fiscal year. If new legislation fails to pass in time, the government will struggle to secure sufficient funds for next year's budget. This risk is particularly acute because Takaichi's proposed budget, a record high of nearly $783 billion, relies on debt financing for about a quarter of its total. Per government plans, most of the new debt issued in fiscal 2026 will be deficit-covering debt. Yet, Takaichi's ruling coalition holds only a slim majority in the House of Representatives and no majority in the House of Councillors, making legislative progress highly dependent on opposition cooperation. While the Democratic Party for the People previously signaled support for debt-related bills, the early election could disrupt political deals, with its leader stating their position is "in flux." Against this backdrop, markets are pricing in risks similar to the U.S. "fiscal cliff" scenario. Political uncertainty has quickly translated into financial market reactions. Expectations of an early election pushed up Japanese government bond yields, with the 10-year yield hitting a 27-year high, pressuring bond prices. Analysts note that rising political risks offer little upside for the bond market. Investors remain cautious about interest rate risks, keeping upward pressure on the yield curve. Considering Japan's debt-to-GDP ratio nears 200% and debt servicing costs continue to rise as a share of fiscal expenditure, fiscal sustainability concerns are amplified against the backdrop of potential Bank of Japan rate hikes. Additionally, expectations of looser monetary and fiscal policies this year further weigh on the yen.

The stronger dollar also supports USD/JPY. The Dollar Index (DXY) is approaching its monthly high near 99.25. In December 2025, the U.S. CPI rose 0.3% month-on-month, meeting market expectations and matching September's increase, while annual inflation held steady at 2.7%. Meanwhile, core CPI (excluding food and energy) rose 0.2% in December, below market expectations, though annual core inflation remained at 2.6%, tying the lowest level in four years. According to the CME FedWatch Tool, the probability of the Fed keeping rates unchanged this month held at 72% after the CPI report. Some major Wall Street banks delayed their rate cut forecasts from January/March to April/June, reflecting a reassessment of Fed policy expectations and supporting the DXY's rebound.

In the daily chart, the Bollinger Bands are widening upward, with moving averages diverging higher. Prices are trending strongly along the Bollinger Upper Band. After a golden cross, upward momentum remains robust, suggesting a high likelihood of testing 160 and 162. The RSI stands at 68, with higher lows, indicating dominant buying by market participants. At the same time, judging from the 4H chart, USD/JPY is oscillating upward along the Bollinger Upper Band and EMA12, remaining within an ascending channel. As long as the pair fails to break below EMA12 effectively, a test of 160 is likely. There is a possibility of a death cross, if formed, prices may pull back to around EMA12 (158.8) and the Bollinger Middle Band (158). The RSI is at 75, signaling overbought conditions, but adjustments could occur at any time. It is recommended to buy at lows.

Trading direction: Buy

Entry Price: 158.7

Target Price: 162

Stop Loss: 156.5

Support: 157.5/156.5/155

Resistance: 160/161/162

Today, WTI hovered around $60.80, with intraday movements characterized by a "short-term rally being suppressed by supply news" pattern. Markets are balancing between increased supply from Venezuela's restored exports and ongoing geopolitical risks related to Iran and Russia. Inventory data temporarily curbed upward momentum, leading to sharp but limited volatility driven by news flow.

First, the most direct factor altering today's price trajectory is Venezuela's resumption of supply. Reports indicate that, following changes in U.S. actions regarding Venezuelan exports, more Venezuelan crude is flowing to the U.S., increasing North American crude availability and widening the WTI-Brent discount, which exerts short-term downward pressure on WTI.

Second, official and industry data show a recent uptick in U.S. commercial crude inventories, with the API reporting a weekly increase of over 5 million barrels. This is viewed in trading circles as evidence of ample near-term supply, thereby restraining sustained upward price momentum. From the supply side and a political view, OPEC+ didn't make significant production expansions in the past months, maintaining a general stance focused on price stability. However, reports from institutions and the International Energy Agency (IEA) revised global supply growth downward, while demand improvements remain limited, creating a tug-of-war between "news-driven supply" and "structural supply-demand dynamics."

Based on the daily chart, WTI's recent candlestick patterns show a continuous uptrend after breaking through the previous downtrend channel. It briefly surpassed the $61.00 mark yesterday, but closed below it, indicating some resistance at this level.

Currently, WTI faces resistance in the $61.00–$62.00 range. If WTI fails to break above and sustain levels above $62.00 in the short term, the subsequent trend may resume its downtrend, with the first target potentially dropping to the $58.50 support level, or even falling to $55.00. Conversely, if WTI breaks above $62.00 and holds, its upside potential could expand further, with a possible test of the $64.00 resistance level.

Trading direction: Sell

Entry price: 61.00

Target price: 55.80

Stop loss: 62.50

Valid Until: January 28, 2026, 23:00:00

Support: 58.50/57.50

Resistance: 61.21/62.00

In Canada, the employment data for December presented a mixed narrative for market participants. Net employment figures surpassed expectations by increasing by 8.2K, contrasting with the anticipated decline of 5K. However, this was overshadowed by a sharper-than-expected rise in the unemployment rate, which climbed to 6.8% from 6.5%, exceeding the market consensus of 6.6%. Meanwhile, the energy sector is seeing renewed volatility; WTI crude oil prices are trending upward as supply-side risks intensify due to escalating protests in Iran. As the fourth-largest producer in OPEC, exporting nearly 2 million barrels per day (bpd), any sustained disruption in Iranian output poses a material threat to global energy supplies.

Simultaneously, the United States Department of Justice has ramped up its pressure on the Federal Reserve, issuing grand jury subpoenas as part of a criminal investigation into Chair Jerome Powell. The probe specifically examines Powell’s Senate testimony regarding a $2.5 billion headquarters renovation project. Powell has remained firm in his defense, characterizing the investigation as politically motivated and asserting that the Federal Reserve will remain independent, prioritizing economic fundamentals over external political influence.

Despite these assertions, anxiety regarding the Fed’s long-term independence is growing. The market is closely monitoring President Donald Trump, who is expected to announce a successor to Powell later this month, as his term concludes in May 2026. The prevailing sentiment is that the administration will nominate a candidate more closely aligned with its specific economic agenda, introducing a layer of uncertainty into the future path of U.S. monetary policy. On the data front, December's Consumer Price Index (CPI) remained flat month-over-month at 0.3%, while annual inflation held steady at 2.7%. Core CPI ticked up slightly by 0.2%, missing the 0.3% forecast but remaining consistent with previous trends. In the housing sector, while New Home Sales dipped slightly to 737K, the Department of Commerce reported a robust 18.7% year-over-year increase, likely bolstered by cooling mortgage rates.

Supporting the outlook for growth, St. Louis Fed President Alberto Musalem noted that the U.S. economy is positioned to grow at or above potential in 2026, aided by fiscal support and previous rate cuts. He argued that policy is currently near "neutral," allowing the Fed flexibility to manage a cooling labor market. Concurrently, the Bank of England continues to navigate a delicate easing cycle, where solid wage growth complicates efforts to return inflation to the 2% target.

The USD/CAD pair remains entrenched in a definitive primary uptrend, making long positions the preferred tactical approach. This bullish cycle originated on December 26th at the 1.3641 level and extended to a peak of nearly 1.3920 by January 11th.

Although the rally has been aggressive, the pair recently confirmed its strength by breaking above the 1.3872 resistance level. Following a successful retest of this zone—now acting as support—the price has reacted to the upside, suggesting a continuation toward the next major resistance target at 1.3973.

From a moving average perspective, the 100 and 200-period MAs are situated at 1.3759 and 1.3830, respectively. Both indicators are trending well below the current price action, underscoring the intensity of the bullish momentum.

Should a minor retracement occur, the 200-period MA is expected to serve as a reliable dynamic support floor in the short term. However, traders should note that a decisive close below this moving average could signal a deeper structural correction. As long as the price maintains its position above the recently breached resistance, the bulls remain firmly in control of the market narrative.

Trading direction: Buy

Entry price: 1.3894

Target price: 1.3970

Stop loss: 1.3830

Validity: Jan 23, 2026 15:00:00

The United States Department of Justice has intensified its scrutiny of the Federal Reserve, issuing grand jury subpoenas as part of a criminal investigation involving Chair Jerome Powell. The probe centers on Powell’s testimony before the Senate regarding a $2.5 billion renovation project for the central bank’s headquarters. In response, Powell has characterized the initiative as politically motivated, firmly asserting that the Federal Reserve will remain steadfast in defining monetary policy based on economic fundamentals rather than bowing to external political pressures.

Despite this defense, concerns regarding the long-term independence of the Fed are mounting. Market participants are closely watching for President Donald Trump to announce a potential successor to Powell later this month, as his term is set to conclude in May 2026. The prevailing market assumption is that the administration will nominate a candidate more closely aligned with its specific political and economic vision, a prospect that has introduced significant uncertainty into the future trajectory of U.S. monetary policy.

On the data front, the U.S. Consumer Price Index (CPI) for December remained stagnant month-over-month, aligning with expectations at 0.3%. On an annual basis, prices rose by 2.7%, matching previous readings. Core CPI—which excludes volatile food and energy costs—ticked up by 0.2%, slightly missing the 0.3% forecast but remaining consistent with the prior month's data. Meanwhile, the labor market showed subtle signs of resilience as the four-week average for ADP Employment Change improved to 11.75K. In the housing sector, New Home Sales for October dipped slightly to 737K, though the Department of Commerce noted a robust 18.7% year-over-year increase, likely supported by cooling mortgage rates and declining property prices.

Complementing this data, St. Louis Fed President Alberto Musalem stated that the U.S. economy is poised to grow at or above its potential in 2026, driven by fiscal support and the lagging effects of prior rate cuts. While noting that inflation remains closer to 3% than the 2% target, Musalem argued that current policy is positioned near "neutral," providing the Fed with the flexibility to respond to an orderly cooling of the labor market. Concurrently, the Bank of England appears to be navigating a gradual easing cycle; while labor demand remains muted, solid wage growth continues to complicate the bank's efforts to bring inflation back to its 2% target.

In the United Kingdom, the government has announced an investment of $268 million for a potential deployment of British troops in Ukraine. Russian President Vladimir Putin warned that any Western force would be considered a legitimate target.

UK labor market conditions remained weak in 2025, as companies slowed hiring to offset the impact of higher employer contributions to social security schemes. In addition, the UK unemployment rate rose to 5.1% in October, marking its highest level since March 2021.

The GBP/USD pair appears to have entered a more profound corrective phase after failing to establish a new "higher high." The price encountered significant selling pressure at the 1.3493 resistance level, resulting in a rapid retreat.

Crucially, the pair has decisively closed below the 100-period Moving Average, currently situated at 1.3425. This specific moving average had recently served as a reliable dynamic support floor; however, this firm break below it suggests a "support-to-resistance" flip. This shift in market structure strongly indicates that bearish momentum is now the dominant force in the short term.

From an oscillator perspective, the Relative Strength Index (RSI) only reached a peak of 57 before reversing, remaining well clear of overbought territory. This lack of exhaustive buying power suggests that while a minor relief rally back toward the moving average is possible, the path of least resistance remains to the downside.

Consequently, sell-side positions near current resistance levels are technically favored. The primary downside objectives are aligned with the 0.50 Fibonacci retracement of the entire impulse leg, which also converges with a significant local support zone. This confluence of technical indicators greatly increases the probability that this area will serve as the next major target for the ongoing correction.

Trading direction: Sell

Entry price: 1.3465

Target price: 1.3290

Stop loss: 1.3564

Validity: Jan 23, 2026 15:00:00