Forex Focus & Short-Term Outlook for Traders

Today’s market showed lower tension compared with the previous session, as geopolitical risks “cooled off” following adjustments in U.S. policy/trade messaging. Market sentiment therefore stabilized, and safe-haven demand temporarily faded. The key outcome was a rebound in the U.S. dollar, while gold pulled back after hitting record highs in the prior session.

That said, an important point remains: markets are still operating in a headline-sensitive regime. Even small shifts in statements or policy messaging can quickly flip intraday sentiment.

1) Key market move: USD rebounds, gold cools off

After the previous defensive rally, gold fell nearly 1%, retreating toward the 4,79xx USD/oz area as safe-haven demand eased and the USD strengthened.

Notably, Goldman Sachs recently raised its end-2026 gold forecast to 5,400 USD/oz, reflecting continued gold allocation increases from private investors and emerging-market central banks amid policy-related risks. This supports the view that gold’s long-term trend remains constructive, despite potentially sharp short-term volatility.

2) Forex: USD “bounces back” as markets shift from defensive to balanced

While 21/01 was clearly risk-off, markets on 22/01 are showing signs of rebalancing:

• USD rebound: largely driven by weaker safe-haven demand (gold pulling back) and improved sentiment stability.

• EUR softens / loses momentum: as USD strengthens and flows temporarily rotate back into the greenback.

For FX traders, this is a challenging session: the broader trend may not have changed, but technical rebounds can be strong, and chasing one-sided moves increases the risk of stop-loss sweeps.

Trader Outlook (24–48h): Scenario-based execution

A) USD (DXY): prioritize a technical rebound scenario, avoid chasing shorts

Short-term bias: USD may continue to rebound if market conditions remain stable.

Preferred approach:

• Avoid aggressively selling USD immediately after a rebound begins.

• Wait for USD to test key resistance zones before reassessing selling pressure.

Main risk: a new headline that increases tension could quickly reverse USD’s rebound.

B) EURUSD: sensitive to USD and headlines — trade by zones

EURUSD is under pressure as USD rebounds.

Preferred scenarios:

• If USD remains firm, EURUSD may extend its correction.

• If USD weakens again on new headlines, EURUSD can rebound quickly.

Execution approach:

• Trade around support/resistance zones with confirmation (reversal candles / swing structure).

• Avoid chasing buys or sells in the middle of the range.

C) GBPUSD: likely to track USD moves — prioritize pullback setups

GBPUSD often moves in tandem with EURUSD but with higher volatility.

Preferred approach:

• If the broader uptrend remains intact, focus on pullback buys into support.

• If USD rebounds strongly, GBPUSD may see a deeper dip before stabilizing.

D) USDJPY: avoid emotional intraday trading

In an environment with elevated yield-related volatility, USDJPY is prone to stop sweeps and sharp intraday spikes.

Preferred approach:

• Trade only when a clear break-and-retest structure forms.

• Avoid impulse-based intraday entries.

Conclusion

22/01/2026 marks a cooldown session after heightened volatility, characterized by:

• USD rebounding on improved sentiment stability

• gold pulling back after record highs

• FX shifting into a more “balanced” regime, with high intraday reversal risk

Most suitable approach today: trade based on scenarios, prioritize key zones, reduce position size, and increase discipline in risk management.