Strength Dashboard
| Symbol | Rating | Reason |
|---|---|---|
| Currencies | ||
| GBP | Strong Bullish | Hawkish BoE hold fuelling seven-day rally. |
| USD | Neutral | DXY flat near 101, awaiting CPI catalyst. |
| EUR | Weak Bullish | ECB hike cycle supports, but USD spread limits. |
| JPY | Strong Bearish | Carry trade keeps yen weak above 161. |
| AUD | Weak Bearish | Downtrend intact, consolidating above 200-DMA. |
| NZD | Weak Bearish | Corrective bounce building but trend still down. |
| CHF | Neutral | Safe haven bid offset by zero-rate drag. |
| DXY | Neutral | Flat week, CPI and Warsh will decide direction. |
| Indices | ||
| S&P 500 | Weak Bullish | Broad breadth improving, 63% above 50-DMA. |
| Dow Jones | Weak Bearish | Fell 0.5%, value stocks lagging tech rotation. |
| Commodities | ||
| Gold (XAU) | Weak Bearish | Down 1.5%, rate hike fears capping upside. |
| Oil (Brent) | Strong Bullish | Up 5% on Hormuz disruption and supply fears. |
Geopolitical Spotlight
The Strait of Hormuz is the story this week. Iran’s IRGC declared the strait closed on Saturday July 12 after striking a Cyprus-flagged container vessel it accused of using an unauthorised route. The US responded with a third round of strikes in a week, targeting missile storage, drone launch sites and air-defence radar across southern Iran. One crew member is reported missing. Iran then launched retaliatory attacks on US-linked bases in Bahrain, Kuwait, Jordan, Qatar and Oman.
This is the most serious escalation since the June 17 ceasefire MoU was signed. Tanker traffic through Hormuz was already running at roughly 35 transits per day, well below the pre-war average of 110. A full closure, even brief, would remove roughly 20% of global seaborne oil and 20% of LNG supply from transit routes. Brent crude jumped 5% on the week to $76 before the Saturday closure was announced. Oil, the dollar and gold will all gap when markets reopen on Monday.
Watch how oil opens on Monday. If Brent pushes above $80, expect risk-off across equities and a stronger dollar on safe-haven flows. The Oman dual-corridor proposal is the diplomatic path to watch. If either side signals willingness to negotiate transit arrangements this week, oil could reverse sharply. Do not ignore the Tuesday CPI release, which lands 90 minutes before Fed Chair Warsh testifies to Congress.
Forex Markets
GBP was the star of the week, extending a seven-day rally to trade at 1.3394 against the dollar. The BoE’s 7-2 hawkish hold at 3.75% continues to support sterling, with two MPC members voting for a hike to 4%. GBP/EUR hit 1.1738, near the top of its 2026 range. USD traded sideways with the DXY hovering near 101, stuck between sticky inflation data and soft payrolls. Markets are pricing a 63% probability of a September rate hike. EUR edged higher against the dollar, trading near 1.1438. The ECB’s June hike to 2.25% helped, but the 150bp carry gap to the BoE keeps the euro capped versus sterling.
JPY remains under pressure above 161 against the dollar. The carry trade is king here, with speculative short-yen positioning deeply stretched. Intervention risk from Tokyo is elevated. AUD consolidated above its 200-day moving average near 0.6949 in a clear downtrend, while NZD at 0.5693 showed a slightly more convincing corrective bounce. CHF was largely unchanged as USD/CHF consolidated below 0.8139. The franc’s safe-haven appeal is offset by the SNB’s zero interest rate.
Currencies to watch
GBP/USD is the cleanest setup this week. Huw Pill speaks Monday evening, UK GDP drops Thursday, and if Warsh is hawkish on Tuesday, a pullback toward 1.32 is in play. A close above 1.3450 opens the door to 1.35.
USD/JPY is the high-risk play. Above 162 puts Tokyo intervention firmly on the table, but the carry trade offers no easy exit. Watch for BoJ signals.
EUR/USD sits at a crossroads near 1.1440. Tuesday’s CPI will decide whether the pair breaks toward 1.13 or reclaims 1.15.
Tuesday is the pivot for FX. June CPI consensus is 0.1% MoM with headline easing to around 3.9% YoY, but core CPI at 0.3% or hotter would shift expectations fast. Watch how Warsh handles questions on inflation at 10am. The BoE’s Huw Pill, one of two hawks who voted for a hike, speaks Monday. If he repeats his case, sterling gets a hawkish tailwind into the rest of the week.
Indices
It was a split week for US equities. The Nasdaq led with a 1.74% gain and the S&P 500 rose 1.23%, both boosted by a late-week chip rally. The Dow lagged, falling 0.50% as value and cyclical stocks underperformed. The week’s headline was SK Hynix raising $26.5 billion in the largest-ever US IPO by a foreign company, with its ADRs surging 12.8% on debut.
Nvidia gained 4% on Friday, and Meta jumped 6% after a positive AI compute report. But the mood is fragile. Oil’s 5% weekly gain raised inflation fears, and breadth is still not fully broad, with 63% of S&P 500 stocks above their 50-day moving averages, up from 50% a month ago but not yet dominant. The Dow record close above 53,000 on Monday already feels like a distant memory. European markets were weaker, with the STOXX 600 down 1.79% on the week as Middle East tensions weighed.
Earnings season begins in force this week. JPMorgan and Goldman Sachs report Tuesday morning, the same day as CPI. ASML and Taiwan Semiconductor follow later in the week, and their results will set the tone for the entire chip sector. If the Hormuz closure triggers an oil spike above $80, expect equities to sell off hard at the open on Monday. Watch the VIX, which closed at 15.03; a move above 20 would signal genuine fear.
Gold & Oil
Gold fell about 1.5% on the week, settling near $4,121 per ounce. The metal is caught between two forces: geopolitical risk, which would normally push gold higher, and rising rate hike expectations, which are capping the upside. The Fed minutes showed growing concern about inflation becoming broad-based, and markets now assign a 63% probability to a September hike. HSBC lowered its 2026 average gold forecast to $4,560 from $4,864. China’s central bank reported its largest monthly gold reserve increase in over two and a half years in June, providing some demand-side support.
Brent crude surged roughly 5% on the week to close near $76 per barrel. The driver was clear: renewed US-Iran strikes disrupted shipping through the Strait of Hormuz, with tanker traffic still well below normal. The IEA warned that prolonged tensions could delay rebuilding global oil inventories. Then on Saturday, Iran declared the strait closed entirely. The UAE raised crude production to a record high, trying to offset disruptions, but the supply picture remains fragile. WTI closed at $71.41.
Oil is the key commodity this week. Brent closed at $76 before the Saturday Hormuz closure was announced. If the closure holds into Monday, expect a gap higher toward $80 or above. For gold, Tuesday’s CPI is critical. A soft print could reignite gold buyers, but a hot core reading would push hike odds higher and cap XAU/USD below $4,150. Watch $4,060 as downside support and $4,160 as the level to reclaim.
Week in Review
- Iran declared Strait of Hormuz closed after striking a commercial vessel on Saturday.
- Brent crude rose 5% on renewed US-Iran tensions and Hormuz supply fears.
- Nasdaq gained 1.74%, led by chip stocks and SK Hynix’s record $26.5bn IPO.
- Gold fell 1.5% as rate hike expectations offset safe-haven demand.
- GBP extended a seven-day rally, supported by BoE hawkish hold.
- Tuesday July 14: US June CPI (8:30am ET), Fed Chair Warsh testimony to Congress (10am ET).
- Tuesday July 14: JPMorgan and Goldman Sachs Q2 earnings.
- Wednesday July 15: US PPI, Warsh testifies to Senate, Fed Beige Book.
- Thursday July 17: UK GDP, Philly Fed manufacturing, ASML and TSMC earnings.
- Friday July 18: US industrial production, University of Michigan consumer sentiment.
