Strength Dashboard
| Symbol | Rating | Reason |
|---|---|---|
| Currencies | ||
| GBP | Strong Bullish | Hawkish BoE hold fuelling seven-day rally. |
| USD | Weak Bearish | Weekly loss on soft CPI, Warsh limits downside. |
| EUR | Weak Bullish | Modest gains, ECB decision next week. |
| JPY | Strong Bearish | Stuck near 162, carry trade dominates. |
| AUD | Neutral | Flat near 0.695, waiting on jobs data. |
| NZD | Weak Bearish | Soft at 0.569, rate disadvantage weighing. |
| CHF | Weak Bullish | Safe-haven flows supporting the franc. |
| DXY | Weak Bearish | Slipped below 101, soft CPI weighing. |
| Indices | ||
| S&P 500 | Weak Bearish | Down 1.6%, dragged lower by tech. |
| Dow Jones | Weak Bearish | Down 0.9%, relative outperformer this week. |
| Commodities | ||
| Gold (XAU) | Weak Bearish | Below $4,000, biggest weekly decline in a month. |
| Oil (Brent) | Strong Bullish | Surged 10%+ to $88, Iran escalation driving. |
Geopolitical Spotlight
The US-Iran conflict escalated sharply this week. The US reinstated a naval blockade targeting Iranian ports near the Strait of Hormuz, while US Central Command completed six consecutive nights of strikes against Iranian military sites. Iran responded with attacks on US bases in Kuwait, Jordan and Bahrain, and instructed Houthi forces to prepare Red Sea disruptions. Commercial traffic through the Strait of Hormuz remained severely limited.
Oil surged more than 10% on the week to $88 per barrel as supply fears intensified. The conflict is now the dominant driver of energy prices, inflation expectations and broader risk sentiment. The June ceasefire framework has effectively collapsed, with both sides crossing red lines set just weeks ago.
Diplomatic efforts to salvage the ceasefire are underway, but the trajectory is worsening. Watch for any Iranian retaliation against shipping or energy infrastructure this week. If Brent breaks above $90, expect broader market stress. The conflict is also the biggest wildcard for the Fed and ECB decisions later this month.
Forex Markets
USD: The dollar posted a weekly loss after June CPI came in much softer than expected. Headline inflation fell 0.4% month-on-month (the biggest drop since April 2020), pulling the annual rate down to 3.5% from 4.2%. The DXY slipped below 101 to around 100.77. Fed Chair Warsh’s hawkish congressional testimony capped the move lower.
GBP: Sterling was the week’s standout performer, rallying to a two-month high of 1.354 before settling at 1.345. The BoE’s hawkish hold at 3.75% (with two members voting for a hike) is keeping sterling well supported. Markets also priced in Andy Burnham’s expected confirmation as Labour leader.
EUR: The euro edged higher to 1.144, benefiting from dollar weakness. The ECB hiked to 2.25% in June and meets again on July 23. Energy-driven inflation is the key variable for the decision.
JPY: The yen remained pinned near 162 against the dollar, despite the BoJ’s rate normalisation. Carry trade positioning keeps the yen weak, though speculative shorts leave it vulnerable to a squeeze. Intervention risk is rising again.
AUD: Mostly flat near 0.695. The RBA remains one of the more hawkish G10 central banks, supporting the currency, but risk-off sentiment from the Middle East and the chip selloff weighed.
NZD: The weakest of the commodity currencies at 0.569. A less attractive rate differential compared to Australia continues to limit upside.
CHF: The franc gained ground as safe-haven demand picked up. USD/CHF drifted to 0.808 as Middle East tensions supported defensive positioning.
Currencies to watch
GBP/USD: Sterling’s rally has been strong, but resistance near 1.354 is the key level. UK CPI on Wednesday and BoE expectations will determine whether it can break higher. A hot CPI print could push cable toward 1.36.
USD/JPY: Still hovering near 162, which is uncomfortable territory for Japanese policymakers. BoJ intervention risk is real. Any sharp move above 163 could trigger action. Watch for signals from Tokyo this week.
EUR/USD: The ECB decision on Thursday is the pivotal event. If the ECB signals another hike, the euro could push toward 1.15. A dovish hold would likely send it back below 1.14.
Three central bank decisions in eight days will define the FX landscape. The ECB on July 23 is the first test. UK CPI on Wednesday could reshape BoE expectations for July 30. The soft US CPI gives the Fed room to pause on July 29, but oil-driven inflation complicates the picture. Watch the 101 level on DXY as the key pivot.
Indices
US equity markets posted their worst week in over a month, dragged lower by a brutal semiconductor selloff. The Nasdaq fell 2.9% to 25,520, the S&P 500 dropped 1.6% to 7,458 and the Dow lost 0.9% to close at 52,146.
The Philadelphia Semiconductor Index (SOX) officially entered bear market territory, falling 11% on the week and more than 24% from its late-June peak. The selloff accelerated on Friday after Chinese startup Moonshot AI released its Kimi-K3 model, a 2.8-trillion-parameter open-weight AI model that traders compared to the 2025 DeepSeek moment. That fuelled doubts about whether massive US AI infrastructure spending will deliver adequate returns.
Earnings season added to the pressure. Netflix slipped 7.3% on cautious guidance. Intuitive Surgical tumbled 14.2% despite beating estimates, after flagging insurance processing delays. The S&P 500 is still up about 8.9% year-to-date, but the tech rotation is picking up speed, with small caps holding their gains better than large-cap growth.
Next week is the heaviest stretch of earnings season. Alphabet and Texas Instruments report Wednesday (Jul 22). Intel reports Thursday (Jul 23), with all eyes on 18A foundry yield data. AMD hosts its Advancing AI conference on Jul 22-23. These results will determine whether the chip selloff is a healthy correction or the start of something deeper. Watch the 7,400 level on S&P 500 as near-term support.
Gold & Oil
Gold (XAU/USD): Gold posted its biggest weekly decline in over a month, slipping below the $4,000 level before recovering to close near $4,018. The metal is caught in an awkward position. Geopolitical tensions would normally support it, but the same conflict is pushing oil and inflation expectations higher, which strengthens the case for tighter central bank policy. That works against non-yielding assets like gold. The hawkish tone from Fed Chair Warsh, who reiterated that inflation remains too high, added to the pressure.
Oil (Brent): Brent surged more than 10% this week to $88.10 per barrel, hitting one-month highs. The driver was entirely geopolitical. The US naval blockade of Iranian ports, six nights of consecutive US strikes, and Iranian retaliatory attacks on US bases created a sustained supply fear premium. Commercial traffic through the Strait of Hormuz remained severely restricted. The 52-week range now stretches from $58.72 to $126.41, showing just how volatile oil has become in 2026.
Gold is likely to remain range-bound between $3,950 and $4,060 unless the conflict escalates further or the Fed surprises markets. For oil, the $90 level on Brent is the next major threshold. A break above it would signal that markets are pricing in sustained supply disruption. Watch for any signs of shipping route reopening or diplomatic progress, as either could trigger a sharp reversal in oil.
Week in Review
- US CPI dropped to 3.5% from 4.2%, biggest monthly fall since April 2020.
- US-Iran conflict escalated, with the US reinstating a naval blockade of Iranian ports.
- Brent crude surged 10%+ to $88 on supply disruption fears.
- Semiconductor index entered a bear market, down 24% from its June peak
- Moonshot AI’s Kimi-K3 triggered a fresh chip selloff on Friday.
- UK CPI data on Wednesday, Jul 22. Key for BoE expectations.
- ECB rate decision on Thursday, Jul 23. Current rate 2.25%.
- Alphabet and Texas Instruments earnings on Wed, Jul 22.
- Intel earnings on Thu, Jul 23. 18A foundry data is the focus.
- US and UK flash PMIs on Friday, Jul 25.
