DBG Markets: Market Report for Jan 22, 2026

The "Trump‘s Davos Turn" Sparks Risk-On Rotate； What’s Next for Gold, Dollar & Dollar Pairs

The global financial narrative underwent a dramatic transformation over the last 24 hours. Markets shifted into a "furious rally" mode as the geopolitical clouds over Greenland began to part, following a significant softening in U.S. President Trumps rhetoric at the World Economic Forum in Davos.

From "Black Tuesday" to Wednesday's Recovery

The primary catalyst for the current risk-on shift was Trumps speech and subsequent interviews in Davos. By announcing a "wonderful negotiation" with NATO and Denmark, and explicitly stating that military force is "not on the table" for Greenland, the immediate threat of a transatlantic trade war was effectively priced out of the market.

Market participants have interpreted the earlier 25% tariff threats as a typical Trump-style negotiating anchor. With what he called a "new framework" for Arctic security now in place (no explicit details provided), the immediate February 1st tariff deadline has been sidelined, leading to a massive relief rally in global risk assets.

Major U.S. indices recovered nearly all of their "Black Tuesday" losses. The Nasdaq (UT100) led the charge with a 2.1% gain, while European indices closed near session highs.

Safe-Haven Retreat and the Dollar's Rebound

The easing of trade tensions triggered a swift rotation out of safety and back into yield-bearing risk assets. This shift led to a rapid reversal in recent price action.

Gold Outlook: Face Classic “Risk Premium Fade”

After hitting a record high of $4,888 yesterday during the height of the risk-aversion rally, Gold took a heavy hit following Trump's Davos remarks. The metal plummeted over 2%, dropping more than $50 in just a few hours.

In the Asian session this morning, Gold remains under pressure below the critical $4,800 mark as profit-taking accelerates.

XAU/USD, H1 Chart

While remaining technically in an uptrend trajectory, the shift in risk sentiment has caused gold to face classic risk-premium fading selling pressure. This could complicate the upside move in the near-term.

Technically, $4800 is now the major level to watch and a key level for bulls and bears to fight. If gold continues to trade below 4800 intraday, a further profit-taking move is likely, leading to a deeper pullback.

Outlook: Gold is likely to enter a high-level consolidation phase. Watch the $4,800 level closely; if the intraday downside continues, the next support zones lie at the 38.2% Fibonacci retracement ($4,750) and the 50% level ($4,715).

US Dollar Index: 98.50 in Focus

The Greenback halted its decline, reclaiming the 98.50 level. This is now the key level to watch;

However, as uncertainty remains, dollar upside may stay capped, especially since the current trend remains in a broad consolidation (Resistance at 98.80 – 99.00; Support at 98.00). The dollar currently lacks a catalyst for a major boost.

USD Index, H4 Chart

If the dollar holds above 98.50 in the near-term, an upside move toward 98.80 is still likely. However, the next catalyst for the dollar could come after the US PCE Price Index and key US data like GDP and Jobless Claims tonight.

Outlook: Key data tonight—including US Q4 GDP (4.3% exp.), Jobless Claims, and the Core PCE Price Index—will be the decisive factors. If the data shows signs of cooling (lower PCE or slower GDP), it could provide the Fed with more room to cut rates, potentially dragging the Dollar back below 98.50 and extending downside pressure.

GBPUSD Outlook: 1.3400 Support in Focus

GBPUSD, H4 Chart

Over the GBP/USD, the technical outlook still favors a near-term upside after forming a reversal pattern around the critical 1.3400 level. As long as this support holds, the pair maintains its bullish potential.

The successful defense of the 1.3400 psychological floor is pivotal. This level has transitioned from a point of rejection to a base of support, confirming that buyers are stepping in at lower levels.

What is the Focus for Today？

As the trade-war panic subsides, the market's attention is shifting back to core macro policies and corporate health.

1. US PCE Data (Tonight): The Federal Reserve's preferred inflation gauge is the centerpiece of todays session. A print that confirms "sticky" inflation could bolster the Dollar and cap the equity rally.

2. Intel (INTC) Earnings: Reporting after the US market close, Intel will provide a critical litmus test for the semiconductor recovery and the broader AI-driven tech cycle.

3. Bank of Japan (BoJ) Watch: The BoJ meeting is currently underway. While results aren't due until tomorrow (Friday), Yen volatility is expected to spike as traders pre-position for a potential "hawkish hold" from Governor Ueda.