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Crude Oil has reversed last week’s decline after US strikes on Iranian launchers near the Strait of Hormuz and reported Iranian retaliation. The key issue is whether the renewed conflict causes lasting disruption to Hormuz shipping. It is worth noting that the advance so far has been relatively small, and that the upper trend line of the descending price channel in Crude Oil remains intact, so I wouldn't get too excited about this unless WTI can get established above $85 and Brent Crude above $90.
Fed Chair Kevin Warsh’s hawkish Jackson Hole speech on Friday boosted expectations of further Fed tightening (a rate hike of 0.25% is now seen as likely to happen at the next Fed meeting in September), supporting the US Dollar and pressuring Gold and cryptocurrencies.
The US Dollar Index remains near 99.6 at a 2-week high price. A sustained move above 100.00 would strengthen the case for a broader Dollar bullish reversal, as this is an area which looks likely to be obvious support, as it has already acted as support and resistance and is the biggest round number the Index could possibly encounter.
Gold has traded below $4,400 as the stronger Dollar and higher yield expectations dominate, although geopolitical safe-haven demand could make the market volatile. However, it might already have found a floor today.
Bitcoin is near $77,600 and Ethereum near $2,417. Both remain pressured after the hawkish Fed repricing; Ethereum has slipped back below the key $2,500 level. Both seem to be consolidating, with Ethereum looking more technically likely to make a significant (bullish) breakout.
Several soft commodities - Sugar, Wheat, and Soybeans - have broken to new long-term highs. Trend and momentum traders will probably want to be involved here as going long of commodities at bullish breakouts and trailing the stop has historically been a profitable trading method.
There are no high-impact data releases due today.
It is a public holiday today in the UK, so liquidity is likely to be relatively low in GBP pairs and crosses.