DBG Markets: Market Report for Jan 13, 2026

The “Fed Probe” Meets the CPI Reality Check; Outlook for Dollar Pairs, Bitcoin, Ethereum

Todays market narrative is a high-stakes collision between fundamental data and unprecedented political drama. Investors are navigating a dual-threat environment: the crucial December CPI release and the deepening criminal investigation into Fed Chair Jerome Powell. This combination is creating a volatile landscape for the Dollar, major FX pairs, and the crypto complex.

How the Fed Probe & CPI Impact the Dollar

The U.S. Dollar is currently caught in a tug-of-war between economic fundamentals and political risk.

Reports of a criminal investigation into Chair Powell—related to Federal Reserve HQ renovations and alleged policy pretexts—have introduced a “Political Risk Premium” into the Greenback. Markets fear this could compromise Fed independence, making the Dollar less attractive as a stable reserve currency. The probe is widely interpreted as a political escalation by the White House to pressure the Fed into cutting rates faster.

Meanwhile, tonights CPI release (8:30 AM US Eastern Time) will act as a reality check for the Dollar in the midst of this Fed firestorm.

· Normally, a “hot” CPI would strengthen the Dollar by forcing the Fed to hike or hold rates longer.

· Today, however, a strong inflation print could trigger heightened volatility, as it may intensify confrontation between the Trump administration and the Fed.

CPI Volatility Scenarios:

· CPI Beat (>2.8%): The Dollar may spike initially but fail to sustain gains as political concerns dominate.

· CPI Miss (<2.5%): Would give the Fed room for further easing in Q1 or early Q2, potentially combining with the “Probe” news to trigger a sharp corrective move in the Dollar.

Outlook for the Dollar

The Dollar Index is effectively coiling within a tight range as it awaits the CPI catalyst.

USD Index, H4 Chart

Our outlook for the Dollar remains the same: 99.00 remains a key resistance that complicates the upside. On the other hand, yesterdays rebound from 98.40 shows that support remains valid.

Post-CPI Outlook: The impact on the Dollar will remain limited unless the data surprises. At this point, the Dollar could continue consolidating within the 98.40–99.00 range. A breakout will be needed to see a clear direction, with 99.00 capping the upside.

FX Majors: EUR/USD & GBP/USD Pullback Ends？

The volatility in the Greenback is rippling through the major pairs, creating distinct technical setups ahead of the CPI data release.

EUR/USD: 1.1650 Marks End of Correction？

The EUR/USD underwent a period of deep pullback from 1.1800, but yesterday saw a brief break below 1.1650 (a previous resistance that could now act as support) before pulling back, suggesting this could mark the end of the correction.

EURUSD, H4 Chart

Technically, 1.1650 is a major support. Yesterday, the pair saw a sharp rebound but then pulled back again. The next key test will be whether 1.1650 can hold. If it does, this could establish a floor for the recent pullback and signal the end of the corrective wave.

GBP/USD: Cable Resilience

The Pound is showing relatively cleaner bullish construction compared to the Euro, currently benefiting from a slight “anti-dollar” sentiment.

GBPUSD, H4 Chart

1.3400 has proven to be a major support for now, remaining a critical defense zone for bulls. Unless this level breaks, any dip could present a buy-the-dip opportunity, particularly if the Dollar weakens following the CPI release.

Crypto Outlook: Bitcoin & Ethereum in the “Uncertainty Era”

The current market landscape of Fed instability and the upcoming “Clarity Act” is providing a unique backdrop for digital assets, shifting their correlation away from traditional risk assets and toward “anti-fragile” safe havens.

· When the Central Bank is under political attack and its independence is questioned, trust shifts from “Centralized Institutions” (The Fed) to “Decentralized Code” (Bitcoin).

· Digital Asset Market Clarity Act is nearing its critical Senate markup this Thursday (Jan 15). This can be a bullish backdrop for crypto if goes well.

Bitcoin: 90,000 Base Formed

BTCUSD, Daily Chart

From a technical outlook, Bitcoin has been holding firm above 90,000 recently, setting a floor for the price. If this level continues to hold, it suggests buyers are supporting the market. A clear breakout above 94,000 could set a bullish reversal for Bitcoin.

Ethereum: 3,000 Level

ETHUSD, Daily Chart

Meanwhile, the ETH setup is straightforward. The 3,000 mark serves as a major psychological level, and price has been consolidating near this level, suggesting buyers are defending it. Meanwhile, a converging triangle has formed, which often sets up for a breakout move.

Bottom Line

The Dollar remains trapped between soft economic signals and the unfolding Fed probe, keeping EUR/USD testing 1.1650 support and GBP/USD holding firm above 1.3400.