DBG Markets: Market Report for Feb 25, 2026

Hawkish Fed Fuels Dollar; Tariff Risks Sustain GoldEURUSD, GBPUSD, Gold Outlook

The market landscape is increasingly defined by a fierce tug-of-war between a hawkish Federal Reserve and escalating geopolitical trade risks.

The Hawkish Fed: Dollar Resurgence？

The U.S. Dollar has caught a significant bid following the latest round of Fed commentary. Policymakers made it abundantly clear that the combination of sticky inflation (highlighted by last week's 3.0% PCE print) and the inflationary threat of the new 15% universal global tariff leaves virtually no room for near-term rate cuts.

· Chicago Fed President Austan Goolsbee sounded the alarm on the 3.0% inflation rate, pushing back hard against the market's hopes for near-term policy easing.

· Fed Governor Lisa Cook warned that AI could cause structural churn in the labor market.

This hawkish repricing has added fresh fuel to the Greenback, allowing it to shake off recent stagflation fears and pivot back toward yield-driven strength. However, the outlook for the Dollar remains clouded as tariff uncertainties persist.

US Dollar & Dollar Pair Outlook

Over the US Dollar Index, it is making another aggressive push toward the critical 97.80 – 98.00 resistance zone on post hawkish Fed comments.

USD Index, H4 Chart

However, a key downside risk remains: despite a hawkish Fed and the firm pricing out of near-term rate cuts, the Dollar remains capped below 98.00. This suggests that the hawkish Fed narrative is currently insufficient to fuel a decisive breakout.

If the hawkish momentum sustains and the Dollar decisively breaches the 98.00 handle, it will confirm a bullish continuation, placing intense downward pressure on major currency peers. Conversely, a rejection here keeps the Dollar confined to its broader choppy range, affirming that the 98.00 resistance is formidable.

EURUSD Outlook

The recent renewed strength in the US Dollar is acting as a wrecking ball for European currencies. The Euro is heavily pressured by the Greenback's surge, experiencing a pullback of approximately 2.5% from its January highs.

EURUSD, H4 Chart

Operating in negative correlation to the Dollar Index, the pair could potentially establish a base near the current 1.1800 – 1.1750 support zone (mirroring the DXY's 97.80 – 98.00 resistance).

As this zone acts as a major support floor, we would need to see a decisive close below this level to confirm a deeper bearish breakout, potentially opening a technical void toward the 1.1650 area.

Still, given that the Dollar may face resistance overhead, if EURUSD fiercely defends this level and reclaims ground above 1.1800, we are likely to see a bullish continuation.

GBPUSD Outlook

GBPUSD, H4 Chart

The Pound has also struggled recently, but managed to find its footing near the 1.3500 psychological level as the Dollar encountered its ceiling.

For GBPUSD, the 1.3500 level remains the line in the sand. Recent price action has printed a series of lower highs, indicating sustained selling pressure.

GBPUSD, H2 Chart

However, on the shorter-term timeframe, the potential exhaustion of these lower highs suggests that the 1.3500 footing may solidify as robust support. If near-term support holds above 1.3500, coupled with Dollar resistance, a rebound or even a bullish reversal is highly likely.

Overall Outlook: The Dollar is currently supported by a Hawkish Fed, but its failure to push through key resistance levels suggests Dollar bulls remain hesitant. If we see the Greenback retreat on tariff fears, EURUSD and GBPUSD are well-positioned to regain support and resume their broader bullish trends.

Tariff Risk: Gold's Safe-Haven Resilience

Typically, a hawkish Fed and a surging US Dollar act as pure kryptonite for non-yielding precious metals. However, Gold is currently defying traditional market gravity, firmly supported by the sheer magnitude of the global tariff risks.

Investors are actively choosing to park capital in bullion as a hedge against systemic risk and the potential weaponization of global trade, entirely offsetting the headwinds of higher US yields.

XAUUSD, H2 Chart

A technical pullback occurred yesterday, but the rapid rebound after touching $5,100 indicates that this handle continues to provide extremely solid bottom support for the metal. The near-term trajectory remains an uptrend.

Yesterday's pullback and the subsequent strong bounce near $5,100 perfectly demonstrated a textbook "breakout-retest-continuation" pattern.

XAUUSD, M15 Chart

On the intraday outlook, the earlier reclaim above 5150 suggests a potential continuation of last night's upside momentum.

Now, the 5150 – 5170 zone remains a key immediate support for the near-term outlook; holding above this would see extended upside in Gold. A break below would likely see a prolonged consolidation toward 5100 once again.