Geopolitical news dominated global market movements over the past week. US President Trump announced on Saturday that he would impose tariffs on eight European countries to support his Greenland policy, with tariffs on a large number of European goods increasing by 10% starting February 1st. However, by Wednesday, news emerged that discussions were underway and tariffs and military intervention were no longer being considered.

Markets reacted to Trump's statement at the beginning of the week, with stocks falling sharply and the dollar weakening—a reaction similar to the market response after the "Liberation Day" tariff announcement last April, but on a smaller scale. As tensions eased, stocks gradually recovered in the latter half of the week. The dollar ultimately fell about 1% against the euro, returning to levels seen in early January. The US bond market was generally weak, while global bond yields rose, with the yield on Japanese 10-year government bonds reaching its highest level since the 1990s, further contributing to the global yield increase.

Last Week's Market Performance Recap:

Last week, US stocks traded mixed. The Nasdaq Composite Index, supported by technology stocks, continued its recent rebound, while the S&P 500 was largely flat, and the Dow Jones Industrial Average fell. Investor risk appetite was dampened on the final day of a volatile week by a sharp drop in Intel's stock price. At the close on Friday, the Nasdaq rose 0.28% to 23,501.24 points; the S&P 500 edged up 0.03% to 6,915.61 points; and the Dow Jones Industrial Average fell 285.30 points, or 0.58%, to 49,098.71 points. Goldman Sachs' stock price plunged nearly 4%, becoming a major factor dragging down the Dow.

Geopolitical concerns pushed gold to a record high ahead of Trump's speech at Davos last week, but even a apparent easing of the "Greenland crisis" failed to prevent gold prices from continuing their upward momentum in the latter part of the week, pushing the gains to near the $5,000/ounce mark. Spot gold opened the week at $4,654.24, fluctuating between sharp rises, pullbacks, and rapid recoveries throughout the week, reaching a high of $4,990.00 on Friday. Spot gold closed the week at $4,987.80 per ounce, a significant increase of $391.60, or 8.52%.

Silver, after a sustained rally since the second half of last year, finally reached a key target price level expected by the long-term market. After breaking through the $100 per ounce mark, spot silver continued to rise, successively breaking through $101 and $102 per ounce to reach $102.580, setting a new high. Following a 12% increase last week, it recorded another 14% weekly gain.

Last week, the global foreign exchange market was a veritable rollercoaster ride of geopolitical and monetary policy fluctuations. The US dollar as a whole still suffered a severe blow. By the close of trading in New York on Friday, the US dollar index closed at 97.47, a cumulative drop of more than 1.9%, marking its worst week since April 2025. The US dollar index also recorded its worst weekly performance since June: geopolitical uncertainty continued to exert pressure. In the short term, market sentiment remains fragile, with the dollar likely to fluctuate between 97 and 99, while the yen needs to be wary of any unusual movements near the 155 level. A tumultuous week for the currency markets has ended, but greater uncertainty may have just begun.

The euro rose approximately 2% against the dollar for the week, closing near 1.1820. The euro/dollar pair quickly reversed course over the weekend, reaching a new high for the year near 1.1826. This reversal was due to a sharp sell-off in the dollar amid a generally risk-averse environment. Prior to last week, the yen experienced significant intraday volatility against the dollar, sparking discussions about potential government intervention to support the weak yen. The dollar/yen pair briefly broke through 159.00 without clear signals from Bank of Japan Governor Kazuo Ueda regarding exchange rate policy. Ueda spoke more about cooperating with the government to maintain stability in the bond market. However, the dollar's strength failed to hold, and selling pressure quickly emerged, pushing the exchange rate down to 155.889.

The pound/dollar is consolidating its robust weekly gains and pushed toward the 1.3600 resistance level on Friday, potentially reaching a four-month high of 1.3638. The pound's strong rise was fueled by positive UK economic data as the dollar weakened. The pound closed at 1.3636 against the dollar, with the French government's survival in a vote of no confidence also providing support for the euro. UK retail sales unexpectedly rose in December, but with limited impact on the pound. Risk-sensitive currencies performed strongly last week against a weaker dollar. The Australian dollar rose 1.15% against the US dollar on Thursday and continued its upward trend on Friday, hitting a 15-month high of 0.6897 and marking its fifth consecutive day of gains, primarily driven by an unexpected drop in the Australian unemployment rate, which boosted expectations of a Reserve Bank of Australia rate hike.

Bitcoin got off to a bad start last week, continuing its decline since January 15th and closing the week at $88,427. Weekend news of escalating trade tensions between the EU and the US exacerbated this correction and dampened risk appetite. Bitcoin traded below $90,000 on Friday, down nearly 5% for the week. Despite a brief improvement in risk appetite following President Donald Trump's speech in Davos midweek, where he announced the end of plans to impose new tariffs on European countries for their opposition to the US purchase of Greenland, the crypto king remained under pressure due to continued weakening institutional demand.

The yield on the 10-year US Treasury note changed little before the end of the week, holding at 4.24%, a slight pullback from near a five-month high earlier in the week. Investors continued to assess the US economic outlook, awaiting next week's Federal Reserve policy meeting, while finding some relief in President Trump's shift in tariff proposals against Europe and signs of a Greenland deal. Meanwhile, the market expects the Fed to keep the federal funds rate unchanged next week, with the first rate cut anticipated in June.

Market Outlook This Week:

This week (January 26-30), global financial markets will experience a dense window of central bank decisions, core economic data, and policy moves. The Federal Reserve's interest rate decision is the absolute focus, with inflation, employment, and industrial data from multiple countries being released simultaneously. Coupled with the CFTC Commitment of Traders report and Trump's public speech, each event could trigger a repricing of market funds. Traders need to closely monitor the pace and seize trading opportunities amidst the interplay of policy and data.

Pay attention to the Federal Reserve's interest rate decision at 3:00 AM on Thursday (January 29). The market expects it to maintain the federal funds rate at 3.5%-3.75%, which may cause the dollar index to rebound, or even begin a rebound earlier. Following this, Powell will hold a press conference, the content of which may contain unexpected points, becoming a key catalyst for market volatility.

Regarding risks this week:

Risk Warning: Unexpected Policy and Data Require Close Monitoring

Besides core economic data and central bank decisions, traders should be wary of three potential risks:

First, unexpected statements in the Fed's interest rate decision and Powell's speech could directly trigger sharp fluctuations in the US dollar, US stocks, and non-US currencies;

Second, policy statements in Trump's speech concerning trade, geopolitics, and other areas could quickly alter market risk appetite;

Third, significant deviations from market expectations in inflation and employment data from various countries will correct market pricing of central bank monetary policies; Fourth, major global asset classes may rebalance their positions using the CFTC positioning report, potentially triggering trend-based price movements in related assets;

Fifth, weak core economic data from the Eurozone and Germany could exacerbate market concerns about the Eurozone's economic recovery.

This Week's Conclusions:

According to the latest positioning data (week ending January 20, 2026) released by the U.S. Commodity Futures Trading Commission (CFTC) and the Intercontinental Exchange (ICE), global speculative funds' allocation in key financial assets shows a clear structural shift, reflecting the current market's divergent expectations regarding interest rate prospects, geopolitical risks, and different asset classes. The precious metals market highlights safe-haven demand. In the foreign exchange market, net short positions in major currencies against the U.S. dollar remain stable. Sentiment in the commodities sector is positive, especially in the energy sector.

Overall, this week's positioning data paints a picture of divergent market sentiment: speculators are shifting towards a defensive stance in the interest rate market, reducing risk exposure in the stock market, while viewing gold and crude oil as important tools for hedging geopolitical risks and economic uncertainty. This shift in positioning coincides with the macroeconomic backdrop of ongoing global geopolitical tensions and a critical observation period for the monetary policy paths of major central banks.

Geopolitical Tensions Escalate in Greenland; Gold, Crude Oil, and the US Dollar Reshape Their Trends

Last week, US President Trump announced plans to impose tariffs on eight European countries over Greenland, a move that immediately triggered strong reactions from leaders of many European countries and both parties in the US Congress. This sudden geopolitical tension is expected to significantly disrupt market sentiment early next week, dominating the short-term trends of gold, crude oil, and major foreign exchange currencies. The market is shifting from traditional macro trading models to a repricing of geopolitical risk premiums and energy supply stability.

Geopolitical Conflict Escalates: From Tariff Rhetoric to Cracks in the Transatlantic Alliance

The latest developments have gone far beyond the scope of general trade frictions. Trump stated that the US would impose a 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1st, and threatened that if a deal to "fully acquire Greenland" was not reached, the tariffs would rise to 25% from June 1st. This statement was immediately characterized by many European countries as "unacceptable" blackmail and a "completely wrong" act. The core logic behind the fundamental impact lies in two points: first, the escalating risk aversion, and second, concerns about potential shocks to European energy supplies. On the EU side, the largest political group in the European Parliament has clearly stated that it will suspend the ratification of the EU-US trade agreement and the arrangement to lower tariffs on US products within the agreement. This move means that transatlantic trade relations may not only fail to deepen but may even risk regression.

Crucially, domestic political resistance in the US is beginning to emerge. Senate Democratic Leader Schumer has pledged to push for legislation to prevent the tariffs from being implemented, calling them "reckless" and based on "unrealistic fantasies." The co-chair of the bipartisan NATO monitoring group in the Senate has also warned that such rhetoric will only benefit adversaries and hopes to see NATO fracture. Opposition from Congress, especially from both parties, adds significant political uncertainty to the actual implementation of the tariff threat.

Safe-Haven Asset Analysis: Gold's "Decoupling" and Re-anchoring to Real Interest Rates

The current situation provides multiple positive supports for gold. First, the escalation of direct geopolitical risks, especially disputes involving the US and its traditional core allies, will drive safe-haven funds into gold. Secondly, global populist policies are at historically high levels, typically accompanied by a macroeconomic environment of slower economic growth, rising inflation, and decreased trade openness over the next 10-15 years, fundamentally benefiting non-credit assets like gold.

Technically, gold prices have recently shown a "decoupling" from the traditionally negative correlation with US Treasury real interest rates. This means that under the current macroeconomic and geopolitical structural landscape, safe-haven demand and the diversification of global reserves to de-dollarize are becoming more dominant pricing factors than real interest rates.

The key support range can be referenced from the previous consolidation platform's central area. The logic behind this is that geopolitical risk premiums provide bottom support; if the situation does not deteriorate sharply, some profit-taking may be active in this area. Close attention should be paid to subsequent statements from European and American officials, the outcome of the EU meeting, and fluctuations in the US Treasury market. Any news indicating a de-escalation of the situation or successful congressional obstruction could trigger a short-term pullback in gold prices.

Against the backdrop of rising populism and a simultaneous rise in gold prices, the logic of asset allocation has changed. The explanatory power of traditional frameworks has declined, and the failure of correlation itself has become a new source of risk. Gold volatility may intensify. Energy and Foreign Exchange Markets: Dual Pressure from Supply Concerns and the US Dollar

The impact on the crude oil market will be more complex. On the one hand, geopolitical risks themselves will bring a risk premium to oil prices. On the other hand, this dispute directly involves several European energy importers and North Sea oil producers (such as Norway and the UK). Although the tariff threats do not currently clearly distinguish between commodity categories, any measures that hinder transatlantic trade flows could disrupt the global crude oil trade pattern and trigger market concerns about supply stability. Furthermore, Russia is a key energy supplier to Europe. Against the backdrop of the ongoing Russia-Ukraine conflict, any rift in the US-EU alliance could affect the coordination of European energy security strategies, thereby impacting the global energy supply and demand balance in the longer term.

In the foreign exchange market, the euro against the US dollar will be the focus. Initially, as Europe is the direct victim, the euro is usually under pressure due to risk aversion. However, as Europe demonstrates an unexpectedly united response (such as suspending the ratification of the US-EU trade agreement), and domestic opposition in the US is rising, market logic may shift to "the bad news is out" or concerns about a potential loss of dollar hegemony. If the euro can hold key psychological levels and respond strongly but uniformly to the EU's stance, it has the potential for a short-term rebound. The dollar, however, faces a dilemma: its traditional safe-haven appeal may provide support, but the prospect of the US actively undermining alliances, escalating congressional political infighting, and potential trade damage are fundamentally bearish.

Conclusion: Political maneuvering dominates the market; be wary of rapid shifts in sentiment.

Financial market movements will be highly dependent on the political process surrounding Greenland, rather than simply economic data. The following key moments will dominate market sentiment:

1) Scenario Development: If the EU demonstrates a strong but unified stance after its emergency meeting, while opposition in the US Congress intensifies, the market may interpret this as a reduced likelihood of tariffs being implemented, potentially leading to a temporary rise in risk appetite, causing a partial pullback in gold and the yen, while the euro and European stocks rebound. Conversely, if the Trump administration maintains its hardline stance, or if dialogue between the US and Europe breaks down, safe-haven sentiment will dominate the market, with gold, the dollar, and US Treasuries potentially rising simultaneously (a purely safe-haven pattern), while risk assets will come under pressure.

2) Asset Correlation Restructuring: As the institutional report in the material points out, the traditional "US Treasury bonds—US dollar—gold" correlation is failing. Next week, we may see the US dollar and gold strengthen in tandem due to the same safe-haven driver, or we may see a pattern of the dollar falling and gold rising due to damage to US credit. Traders need to abandon simplistic historical correlation thinking and pay more attention to the specific movements of capital flows.

3) Impact on US Stocks: The tariff threat directly targets Europe. If implemented, it will raise US import costs and consumer prices, which contradicts the Fed's anti-inflation target. At the same time, corporate profit prospects face new uncertainties. Therefore, the impact on major US stock indices such as the Dow Jones Industrial Average is bearish. However, if the tariff threat is successfully blocked by Congress, the market may see it as a reduction in political risk, thus creating a short-term positive. Overall, political uncertainty itself will suppress risk appetite in US stocks.

The Greenland issue has pushed geopolitical risk to the core of market pricing. The market will likely price this out at the beginning of next week, and increased volatility is inevitable. The core task for traders lies in closely monitoring every statement from European and American officials and the subtle clues in the US Congressional legislative process, accurately grasping the rapid shifts in market sentiment between "risk aversion" and "risk easing." Against the backdrop of structural "decoupling" and rising populism, such market volatility triggered by political surprises may become more frequent in the future, making flexibility and a deep understanding of fundamental logic crucial.

Gold is consolidating at high levels; it just won't collapse; what's the catch?

Last week, spot gold traded slightly below $5,000 during the European session, in a narrow range near historical highs. While the previous uptrend remains intact on the daily chart, with prices consistently moving within an upward channel, recent price action has become hesitant: rallies followed by pullbacks, then rapid rebounds driven by buying pressure, exhibiting a typical tug-of-war. The market is like a car with the accelerator pressed but the gear stuck—the power is still there, but the pace of movement has been paused.

The core reason for this stalemate lies in the significant divergence in macroeconomic signals. Gold's pricing logic primarily revolves around real interest rate expectations, the strength of the US dollar, and safe-haven demand, and recently these factors have been conflicting. On one hand, inflation data has been weak, with core inflation below expectations, leading to market speculation that the Federal Reserve might shift to easing measures earlier than expected, providing support for gold; but on the other hand, the US labor market remains strong. Strong employment data suggests a potentially longer interest rate hike cycle and a prolonged period of high interest rates. This would push up real interest rates and the attractiveness of the US dollar, conversely suppressing gold, which does not generate interest.

Against this backdrop, the policy path has become ambiguous, and policymakers have repeatedly emphasized "data dependence," making it difficult for traders to form a unified expectation. The result is a high-frequency oscillating pattern of "selling gold when the data is good and buying gold when the data is bad." The current market divergence between bulls and bears has reached a critical point, lacking only a catalyst to break the equilibrium.

The US Dollar, Interest Rates, and Geopolitical Risks: A Three-Way Battle

The US dollar and real interest rates are currently the main forces suppressing gold's upward movement. With strong employment data, the US dollar index rebounded to a multi-week high, further increasing the opportunity cost of holding gold. Theoretically, a stronger dollar and rising real interest rates should weaken the attractiveness of gold, which is a key reason why gold prices failed to break through to higher levels.

However, gold did not experience a deep correction, but instead showed strong resilience around $4,600, indicating that other forces are supporting the price. The most crucial factor is that the market's demand for a medium-term risk premium remains. When policy prospects are uncertain and global geopolitical tensions are high, gold's role as the ultimate safe-haven asset becomes prominent. Recent volatile situations in the Middle East have seen repeated escalations, with each instance of heightened tension triggering a short-term influx of funds into the gold market, driving prices up rapidly; conversely, once the situation eases and safe-haven demand cools, gold prices tend to fall briefly. This "news-driven" volatility complicates trading and discourages investors from chasing highs or taking large short positions.

Furthermore, the market is closely watching the US Supreme Court's ruling on tariff-related matters. This seemingly distant event could actually impact future inflation and economic growth expectations. If the ruling reduces uncertainty about trade policy, market concerns about stagflation may ease, reducing safe-haven demand and putting short-term pressure on gold; conversely, if uncertainty persists or even intensifies, gold's risk-hedging value will be further strengthened. It can be said that currently, not only economic data is influencing gold prices, but even minor judicial developments can become the trigger for market movements.

Technical Analysis Reveals a Hidden Clue: The Uptrend is Not Over, but Momentum is Weakening

From a technical chart perspective, gold remains in a healthy uptrend. On the daily chart, the price is within an upward channel, with $4,500.00 being a key psychological support level. If the price retraces to this area, the market will closely watch for strong buying support.

Indicators also provide important clues. The MACD indicates that the medium-term bullish pattern remains intact. However, it's worth noting that the MACD histogram has not continued to expand, suggesting that upward momentum has slowed compared to the previous period. The RSI (14) is in a relatively strong range but has not entered overbought territory, consistent with the characteristics of "strong consolidation rather than accelerated upward movement."

In summary, the current technical pattern resembles a phase of turnover and digestion during an uptrend, rather than a signal of a trend reversal. The market is accumulating energy, awaiting a breakout opportunity. The true directional choice is likely to occur after the release of key data or the conclusion of a major event.

Conclusion: What's next? Two scenarios are unfolding:

If subsequent data shows continued cooling inflation, the Federal Reserve releases dovish signals leading to a decline in real interest rate expectations and a weaker dollar, while geopolitical risks remain unresolved, then gold is likely to challenge the $5,000 market consensus high again and attempt to reach the potential ultimate target area around $5,500. However, it's important to note that if it fails to hold after a breakout and quickly falls back into the range, it may be a false breakout, and a bull trap should be anticipated.

If economic data remains strong, the market reprices to a scenario of "higher interest rates lasting longer," coupled with a decline in safe-haven demand, gold prices may continue to face pressure around $4,600, subsequently retracing to test the $4,500 support level. However, this does not necessarily signify the end of the bull market; it could more be a technical correction of previous gains. The key lies in whether a structural low emerges during the pullback.

Has the old rule of "buying the dollar as a safe haven" failed? What's the truth?

Trump's "Greenland ambitions" have ignited a global crisis, reigniting tensions between the US and Europe and fueling market risk aversion. However, non-dollar currencies have generally performed unusually strongly. On the surface, geopolitical conflicts often suppress risk appetite, leading to a rise in the US dollar. But this time is different: the dollar hasn't risen as it has in the past; instead, it has weakened against major currencies like the euro. This raises the question: has the old rule of "buying the dollar as a safe haven" failed?

In fact, the rules haven't changed; rather, the underlying logic driving the market is shifting. Previously, investors believed that market turmoil would drive funds into the dollar and US Treasury bonds for safety. But now, investors are finding the situation more complex. If the Federal Reserve's independence is questioned, the dollar's "safe-haven asset" label may be under scrutiny.

Independence refers to the central bank's ability to formulate monetary policy independently based on economic data, free from political interference. Once this credibility is damaged, the market will demand higher risk compensation. In other words, investors will question whether the Federal Reserve will distort interest rate decisions for electoral or political purposes. This concern won't immediately trigger a sell-off, but it will quietly push up the yield on US Treasury bonds, the "benchmark interest rate" for global financing. As a result, not only will borrowing become more expensive in the US, but financing costs for businesses and individuals in Europe, Japan, and other regions will also rise. This impact spreads like ripples, known as the "global spillover effect."

This precisely illustrates that the market has begun to be wary of this potential risk. Once a consensus is formed, even a change in expectations will lead to a repricing of dollar assets.

"De-dollarization" hasn't even begun, but a hedging wave has already quietly emerged.

People often say in the market, "De-dollarization is here," as if countries are frantically selling off dollar assets. But the reality is different. Data shows that in the past 12 months ending in November, overseas investors cumulatively increased their holdings of US long-term securities by $1.569 trillion, a record high. These purchases cover US Treasury bonds, corporate bonds, stocks, and government agency bonds. If it were truly a large-scale withdrawal, how could there be a net inflow?

What is actually happening is a different kind of behavior: increased hedging demand. Many foreign investors holding dollar assets will choose to increase their foreign exchange hedging ratio when risks rise. In other words, they want the returns from US assets but don't want to bear the risks of exchange rate fluctuations. Therefore, they sell dollars and buy their own currency through derivatives, creating actual dollar selling pressure. This explains why the dollar weakens during periods of market turmoil.

Interest Rate Expectations

The main driver determining the dollar's trajectory remains the Federal Reserve's policy path. Over the past few months, the market has repeatedly revised its expectations regarding the pace of interest rate cuts: initially, betting on rapid rate cuts caused the dollar to fall; subsequently, inflation rebounded, hawkish voices emerged, and the dollar recovered slightly. Behind this back-and-forth fluctuation is actually a dual game of interest rate expectations and trading positions.

It is particularly noteworthy that the dollar previously accumulated a large number of long positions, a typical example of "crowded trading." When market sentiment reverses, these leveraged funds often liquidate their positions en masse, causing price declines far exceeding changes in fundamentals. This is why the dollar sometimes experiences "plunging" drops: because too many investors want to exit simultaneously.

The real danger lies not today, but tomorrow's crisis of confidence.

In the medium to long term, the dollar faces not only the challenge of cyclical narrowing interest rate differentials but also structural erosion of confidence. There is a growing speculation about trade policy instability, geopolitical security concerns, and political interference in the independence of the Federal Reserve. These factors will not immediately destroy the dollar's status, but will gradually increase its "risk premium" as a reserve currency.

Once the market generally believes that "the dollar is no longer so safe," its financing costs will rise permanently, thus affecting the price of capital in the global economy. This change is slow, but once a trend is established, it is extremely difficult to reverse.

Conclusion:

The current situation is more like a transitional period: In the short term, the dollar is still fluctuating within its recent range, as most major central banks are nearing the end of their interest rate cuts, while the Federal Reserve still has room to cut rates, and the interest rate differential advantage no longer unilaterally supports the dollar; in the medium term, if the issue of institutional credibility continues to escalate, volatility may be systematically amplified, and central banks around the world will be forced to deal with "extreme fluctuations" in their currencies.

Ultimately, the market is shifting its focus from "whether the next interest rate hike or cut will be" to "whether this system is still reliable." Under this new framework, simply discussing "whether to buy the dollar for safe haven" is no longer sufficient. Investors need to closely monitor the correlation between interest rate expectations, hedging flows, and key technical levels to understand the true direction of this silent shift.

Geopolitical Crisis; Oversupply - Oil Prices Caught in a Dual Narrative Tug-of-War

US crude oil prices have fluctuated repeatedly in recent weeks as the situation in Iran has stabilized, safe-haven buying has partially subsided, and market focus has shifted from short-term geopolitical risks to long-term structural supply and demand pressures, putting downward pressure on oil prices.

Investors' attention remains focused on the aftermath of US President Trump's intention to control Greenland. This event has disrupted financial markets and reignited concerns about a potential trade conflict between the US and Europe. Although the situation has increased risk awareness, market prices indicate that market expectations remain anchored to a negotiated resolution rather than a full-blown retaliation.

Current pricing does not reflect the worst-case scenario. Expectations of a compromise are easing risk premiums, even as political headlines continue to create uncertainty. The relative size of the US economy and its energy self-sufficiency are seen as factors influencing any escalation, which in turn affects how traders assess downside risks rather than immediately triggering a price revaluation.

Oversupply Signals Dominate Medium-Term Outlook

Besides geopolitical factors, the crude oil market continues to face pressure from evidence of oversupply. Spot crude prices in parts of the Middle East have retreated as OPEC+ producers increase output. The International Energy Agency has repeatedly warned of a significant oversupply in 2026, reinforcing expectations that rising inventories could drag down prices in the long term.

These supply dynamics are closely linked to the subdued price performance. Even with short-term disruptions or political events, the expectation of oversupply limits upside potential. Therefore, geopolitical developments are more likely to exacerbate price volatility than to act as a catalyst for sustained price increases.

Currency Movements and Structure Limit Downside

Despite strong risk aversion in the overall market, several factors still help limit downside pressure. A robust spread structure indicates that near-term supply is tighter than longer-term supply. ING's Warren Patterson notes that these factors offset some of the negative sentiment, suggesting that the market structure still reflects demand for spot crude oil.

This relationship reflects a divergence between short-term tightness and long-term oversupply expectations. Despite the resilience shown by near-term contracts, the forward curve continues to signal caution regarding supply and demand balance later in the year.

Local Tension Risks Remain

Parallel to oversupply concerns, specific disruptions have led to localized supply tightness. Issues at Union ports along the Black Sea-Caspian Pipeline, coupled with a malfunction at Kazakhstan's Tengiz oil field, have resulted in reduced crude oil flows from the Mediterranean region in the short term. While the overall outlook remains dominated by oversupply risks, these constraints have provided some support for prices.

The current crude oil market is being influenced by conflicting narratives. Geopolitical uncertainty and localized supply disruptions have provided intermittent support, while expectations of a significant global oversupply continue to limit price gains. Until clearer signals emerge regarding sustained strong demand or substantial supply constraints, prices are likely to remain range-bound, sensitive to news, but anchored by structural fundamentals.

Technical Analysis

From a weekly perspective, the key resistance level for crude oil prices remains the high of 61.96 reached during the previous escalation of US-Iran tensions, a level that also coincides with the midline of the descending channel. If prices can clearly hold above this level, the upside target could be $64.70.

Conclusion: Crude oil prices are caught in a tug-of-war between bulls and bears.

The easing of the unrest in Iran has reduced the likelihood of a US strike disrupting supply. Meanwhile, market attention has turned to the standoff over Greenland, limiting oil price gains. The Greenland situation has become the new focus, leading to a tug-of-war between bulls and bears in oil prices, with the $60 mark for WTI crude becoming a key resistance level.

At the same time, the main trend remains bearish, consistent with the risk of structural oversupply, unless prices continue to hold above the aforementioned prominent resistance levels, thereby changing the dominant market narrative.

Overview of Important Overseas Economic Events and Matters This Week:

Monday (January 26): US November Durable Goods Orders (Preliminary) (%); US October Wholesale Inventories (Preliminary) (%); Australia Day Holiday (markets closed)

Tuesday (January 27): US January Conference Board Consumer Confidence Index; Eurozone January ZEW Economic Sentiment Index

Wednesday (January 28): Australia Q4 CPI (Quarterly) (%); US EIA Crude Oil Inventory Change (10,000 barrels) for the week ending January 23; UK December Unadjusted Input PPI (Year-on-Year) (%); UK January CBI Industrial Orders Balance; US December Pending Home Sales Index (Month-on-Month) (%); ECB President Lagarde and BlackRock CEO Fink attend a discussion at the World Economic Forum

Thursday (January 29): US November Trade Balance (USD billion); US Initial Jobless Claims for the week ending January 24 (10,000s); US November Factory Orders (MoM) (%); US November Wholesale Inventories (Final MoM) (%); US Q3 Real GDP (Final Annualized QoQ) (%); ECB Releases December Monetary Policy Meeting Minutes

Friday (January 30): Japan January Tokyo CPI (YoY) (%); Japan December Unemployment Rate (%); Eurozone January Economic Sentiment Index; Eurozone Q4 Seasonally Adjusted GDP (Preliminary) (%); Eurozone December Unemployment Rate (%); US December PPI (YoY) (%); US January Chicago PMI

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