The weekend brought a sharp reversal of Friday's cautious de-escalation narrative. Iran expanded its military strikes to Qatar, the UAE, Jordan and Oman while declaring the Strait of Hormuz closed, prompting a fourth wave of US strikes in response. Asian equity markets have fallen hard, US equity futures are pointing lower, and the risk-off shift is coherent across asset classes. Oil has surged approximately 4%, the dollar is firm, Treasury yields have risen, and the September Federal Reserve rate hike probability has jumped to around 61% from the 25% range seen at the start of last week.
The two instruments demanding the most attention today are WTI crude and USD/JPY. WTI has opened near $74.18 - traders holding longs from last week's $73.00-$73.50 zone should trail stops to protect gains rather than add at stretched levels. The key question for oil through the London session is whether the Hormuz closure declaration holds or gets walked back by CENTCOM escort operations; the answer to that question will define the day's range. USD/JPY opened near 161.68-161.96, caught between the structural yen-positive GPIF repatriation signal from Friday and this morning's dollar safe-haven demand. The 162.50 level remains the ceiling to watch.
Gold is under pressure at $4,076 despite the escalation - the rate-hike channel is suppressing what should be a geopolitical safe-haven bid, and the entry trigger of $4,100 on a confirmed 30-minute close remains the only valid long signal. EUR/USD trades near 1.1403 with the CFTC EUR short at its most extreme reading in the dataset, a compressed spring awaiting a catalyst. Tuesday's US CPI and Fed Chair Warsh's first Congressional testimony are the week's hard catalysts that will define the next directional leg across all instruments covered here. The full briefing contains specific entry levels, stop placements, early warning signals, and the institutional pressure watchlist that tells you exactly which positions are most likely to move with conviction through this session.