Impact on US-EU tensions: Risk-off, US dollar subdued, heightened demand for Gold and Silver

• Geopolitical escalation drives risk-off: Trump’s tariff threats against key NATO allies over Greenland have sharply intensified US–EU tensions, prompting EU retaliation plans and triggering a broad risk-off move across global equities, particularly in Asia and US index futures.
• US dollar weak, safe havens surge: Despite risk aversion, the US dollar failed to benefit as the “debasement trade” narrative took hold. Capital rotated into precious metals, with gold and silver surging to fresh record highs.
• Technical damage to equities, bullish momentum with metals: US Nasdaq 100 and European indices (DAX) show near-term technical breakdowns or mean-reversion risks, while gold and silver maintain bullish acceleration, reinforcing their role as primary geopolitical hedges.

“Tarriff Man” is backed with a vengeance. After the “capture” of Venezuela at the start of the new year via the forceful removal of Venezuela’s leadership and the seizure of oil assets to be placed under US control, Trump has set sight on Greenland next, the resource-rich Arctic territory under Denmark’s autonomous control.

Trump has escalated his confrontational foreign policy stance by deploying tariff threats against long-standing US allies within NATO, leveraging trade pressure in a dispute over sovereignty and control of Greenland.

Trump has threatened eight opposing NATO members over the weekend, including France, Germany, and the UK, with a 10% tariff from 1 February, rising to 25% in June, unless they agree to facilitate a US purchase of Greenland.

In retaliation, the EU looks set to void the US-EU trade truce deal agreed last year, as France plans to push the EU to activate its most powerful trade retaliation tool, the anti-coercion instrument, to be used for the first time against the US.

All in all, EU officials have aimed to introduce more retaliatory measures, such as new taxes on tech companies or targeted curbs on investments in the EU, beyond the earlier suspended tariffs on 93 billion euros of US products, to counter the US’s pressure on Greenland.

To add fuel to the fire, key US White House officials have continued to back Trump, with the US Treasury Secretary Bessent reiterated that the US will not back down on taking over Greenland, citing that the EU is too weak to ensure its security.

The first reaction is a risk-off sentiment in today’s Asia session at the start of a brand-new trading week, where major Asia Pacific stock markets traded lower, including Japan’s Nikkei 225, and Hong Kong’s Hang Seng Index slipped by 0.6% and 1% in line with the intraday losses of 1% to 1.3% seen on the S&P 500 and Nasdaq 100 E-mini futures at the time of writing.

The US dollar does not benefit from this current episode of risk-off as the “debasement trade” narrative takes hold due to the latest US foreign policy towards its European allies, as traders shifted demand towards safe-haven precious metals. The US Dollar Index dropped by -0.2% intraday, while gold and silver rocketed by 1.6% and 3.5% respectively to hit fresh record highs.

Here are five intraday (hourly) technical setups on key cross-assets (Nasdaq 100, Hang Seng Index, Germany DAX, Gold & Silver) to watch as the trading session unfolds today in the aftermath of the US trade tariffs threat towards the EU.

The price actions of the US Nasdaq 100 CFD index (a proxy of the Nasdaq 100 E-mini futures) have tumbled below its 20-day and 50-day moving averages, as well as the ascending channel support from the 21 November 2025 low.

These latest observations suggest that the earlier medium-term uptrend phase of the US Nasdaq 100 CFD index has been damaged and the likely control shifted back to the bears at least in the near-term (see Fig. 1).

Watch the 25,550 key short-term pivotal resistance (also the gapped down formed at the start of today’s Asian session and the 20-day moving average) to maintain the short-term bearish bias to expose the next intermediate supports at 25,133, and 24,870 (close to 76.4% Fibonacci retracement of the prior minor up move from 18 December 2025 low to 13 January 2026 high).

On the other hand, a clearance and an hourly close above 25,550 invalidates the bearish tone for a retest on the stubborn range resistance of 25,760/25,830 in place since 8 December 2025.

The medium-term uptrend of the Hong Kong 33 CFD index (a proxy of Hong Kong’s Hang Seng Index futures) remains intact as price actions continue to oscillate above its 20-day and 50-day moving averages.

Right now, the recent three bearish reactions from its recent minor range resistance of 27,175 from 13 January to 16 January 2026 have skewed the bias for a potential minor mean reversion decline scenario to seek a retracement back to retest the area around the 20-day and 50-day moving averages (see Fig. 2).

Watch the 26,870 key short-term pivotal resistance to expose the next intermediate supports at 26,330, 26,220 (also the 20-day moving average), and even 26,045 (also the 50-day moving average).

On the flip side, a clearance and an hourly close above 26,870 negates the bearish tone for a retest on the 27,175 minor range resistance in the first step.

The Germany 30 CFD index (a proxy of the DAX futures) gapped down and broke last week’s minor range support of 25,260.

The odds are now skewed towards a minor mean reversion decline towards its 20-day moving average and the medium-term ascending trendline in place from the 21 November 2025 low.

Overall, the medium-term uptrend remains intact with potential intraday weakness in the first step before a renewed bullish move materializes.

Watch the 25,260 key short-term pivotal resistance for a potential intraday drop to expose the next intermediate supports at 24,860 and 24,760/24,670 (also the 20-day moving average) (see Fig. 3).

However, clearance and an hourly close above 25,260 invalidates the bearish tone to seek a retest on the current all-time high area of 25,505, and above it sets sight on the next immediate resistance at 25,800 (Fibonacci extension).

The current price actions of Gold (XAU/USD) gapped up at the opening of today’s Asian session with a parallel bullish breakout above its former descending trendline resistance seen on its hourly RSI momentum indicator.

These observations suggest a potential minor bullish acceleration phase for Gold (XAU/USD). Watch the US$4,595 key short-term pivotal support; a clearance above US$4,684/4,687 near-term resistance opens scope for the next intermediate resistances to come in at US$4,720 and US$4,774/4,780 (see Fig. 4).

On the other hand, a break with an hourly close below US$4,595 negates the bearish tone for a minor corrective decline towards its 20-day moving average, exposing the next intermediate supports at US$4,560/4,550 and US$4,512.

Watch the US$86.26 key short-term pivotal support on Silver (XAG/USD) to maintain a potential direct intraday rise scenario for the next intermediate resistances to come in at US$94.60/95.81 and US$98.74/99.47 (also the upper boundary of a minor ascending channel) (see Fig. 5).

On the flip side, failure to hold at US$86.26 and an hourly close below it negates the bullish tone for a minor corrective decline towards the medium-term pivotal support area of US$81.70/78.84 (also the 20-day moving average).