DBG Markets: Market Report for Feb 4, 2026

ADP & Service PMI in Focus: Whats Next for Dollar？ Outlook for Dollar, Gold & Oil Markets

Global markets shifted into a “defensive” stance on Tuesday as the initial “Warsh euphoria” settled into a cautious wait for top-tier economic data. While the S&P 500 faced pressure near its record highs and the Nasdaq led the decline with a 1.7% drop, the focus has turned to whether upcoming U.S. labor and service data will provide the fuel for a Dollar breakout or a sustained gold recovery.

ADP & US ISM Services PMI Preview: The Feds Test

The market is bracing for two heavy-hitting releases today: the ADP Employment Report and the ISM Services PMI. Following Mondays blowout Manufacturing PMI (52.6), all eyes are on the services sector to see if the U.S. economy truly remains “resilient.”

For context, the Feds January meeting removed language regarding caution on the labor market and stated the economy remains strong; today's data will provide a reality check for that statement.

· Bullish Scenario: A higher-than-expected ADP and a robust ISM Services reading would validate the “U.S. Exceptionalism” narrative. This would likely push the DXY above its 97.50 ceiling while acting as a fresh headwind for Gold, potentially dragging it back below the $5,000 psychological mark.

· Bearish Scenario: Conversely, a disappointment would trigger a much-needed “cooling” in yields, allowing Gold to solidify its base above $5,000 and the Dollar to retest the 96.80 support level.

US Dollar Outlook: Reaching for the Ceiling

The U.S. Dollar Index has hit a temporary pause near 97.40 after a relentless four-day rally. While technical indicators suggest the DXY is currently in “overbought” territory, the fundamental floor remains incredibly solid.

USD Index, H2 Chart

The current resistance is capped at the 97.50 ceiling. If the ADP data delivers a surprise to the upside, a break toward 98.00 is highly probable, leading to a continuation of the current uptrend.

For now, the 97.00 – 96.80 zone has established itself as a major floor. Unless we see a significant deterioration in the upcoming NFP or ISM prints, the path of least resistance for the Greenback remains upward.

Conversely, a break below the 97.00 – 96.80 support could signal a potential bearish continuation over the broader trend.

Gold (XAU/USD) Outlook: The Battle for $5,000

Precious metals have staged a strong recovery after a “brutal sell-off,” with Gold surging back from the $4,600 (which now could be seen as “fair value”) support to reclaim the $5,000 handle in the Asian session.

XAUUSD, H2 Chart

For now, the $5,000 level is the ultimate pivot point; it determines whether Gold is back in its “5000-era” or not.

· Bullish Case: If Gold can stabilize and hold above $5,000, it suggests the market has successfully priced in $5,000 as a decent value and could be looking for a further rally.

· Bearish Case: If Gold fails to maintain $5,000, it confirms that the recent bounce was merely a “technical repair.” The outlook for near-term Gold would shift to consolidation, where a pullback toward 4800 (immediate support) or even 4600 (major support) is likely, leading to a broad range.

Oil Outlook: Why the Sudden Gain？

WTI and Brent Crude have both found their footing, with WTI bouncing off the critical 62.20 support level. The recent gain is driven by a combination of geopolitical friction and a massive supply shock:

· Geopolitical Tensions: The Strait of Hormuz is back in the spotlight after the U.S. military shot down an Iranian drone that approached a U.S. aircraft carrier. This “War Premium” is being re-priced as tensions in the Middle East resurface.

· API Inventory Surprise: The American Petroleum Institute (API) reported a massive 11.1 million barrel draw in U.S. crude inventories—significantly larger than the expected 640k draw.

· Winter Storm: Extreme cold weather in the U.S. has disrupted production infrastructure while simultaneously boosting heating demand, providing a double-layered floor for prices.

As of now, fundamental factors still point to the bullish side for the oil market, which is intact with the technical outlook.

USOIL Technical Outlook

USOIL, H4 Chart

The bullish structure remains intact after a pullback toward the 61.00 – 62.00 support. Any pullback that holds above the 62.20 level remains a “buy the dip” opportunity, as the bullish reversal pattern could now turn into a bullish continuation.

UKOIL Technical Outlook

UKOIL, H4 Chart

Similarly for Brent Crude, the 66.00 level holds as the major support to validate the bullish structure.