Oil prices extended their rally in today’s session, with Brent breaking through the $111 mark and confirming a decisive move above the key $110 psychological barrier. What was once a market anchored by expectations of diplomatic progress is now being driven by the reality of a deepening US–Iran stalemate.
The “hope trade” that followed the earlier ceasefire has effectively unraveled. Investors are no longer positioning for a swift deal. Instead, the market is transitioning back toward a prolonged stalemate scenario, where persistent tension—and the risk of renewed escalation.
The key a fundamental disagreement over negotiation strategy. The US is insisting that nuclear issues be addressed upfront, while Iran is pushing to defer those discussions until after the conflict is formally resolved and shipping disputes are settled.
This sequencing dispute is not just a procedural hurdle—it reflects a deeper strategic divide. Washington is unwilling to give up its naval blockade leverage without addressing nuclear concerns, while Tehran is resisting any framework that front-loads those concessions.
As a result, negotiations are effectively stuck. The lack of progress is reinforcing the market’s view that the conflict is entering a prolonged phase, where resolution is delayed and risks remain elevated.
Technically, the breakout today confirms a bullish shift. Brent has cleared its near-term falling channel, suggesting that the correction from 119.24 hsas ended at 87.79. As long as 104.30 holds, the path now points toward a retest of the 119.24/70 zone.
Looking ahead, a key risk factor lies in the status of backchannel diplomacy. Any official confirmation that Pakistani mediation has collapsed would remove a critical communication channel and potentially return the situation to pre-ceasefire conditions.
In currency markets, the shift in sentiment is already evident. Dollar is surging broadly on safe haven demand, reflecting a move toward more defensive positioning. Yen is the second strongest performer, supported by earlier hawkish signal from the Bank of Japan. Canadian Dollar is also benefiting from the oil rally. Kiwi, Swiss Franc, and Sterling are lagging. Euro and Aussie are trading in the middle.
In Europe, at the time of writing, FTSE is down -0.24%. DAX is down -0.74%. CAC is down -0.60%. UK 10-year yield is up 0.056 at 5.056. Germany 10-year yield is up 0.036 at 3.077. Earlier in Asia, Nikkei fell -1.02%. Hong Kong HSI fell -0.95%. China Shanghai SSE fell -0.19%. Singapore Strait Times fell -0.10%. Japan 10-year JGB yield fell -0.014 to 2.465.
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GBP/USD Mid-Day Outlook
Daily Pivots: (S1) 1.3500; (P) 1.3539; (R1) 1.3572; More…
GBP/USD falls notably today, but stays inside range of 1.3446/3598. Intraday bias remains neutral and further rise is still in favor. On the upside, firm break of 61.8% retracement of 1.3867 to 1.3158 at 1.3596 will pave the way to retest 1.3867 high. However, break of 1.3446 will turn bias back to the downside for deeper pullback.
In the bigger picture, current development suggests that price actions from 1.3867 are merely a corrective pattern within the broader up trend from 1.0351 (2022 low). With 1.3008 support intact, medium term bullishness is maintained and break of 1.3867 is back in favor for a later stage, towards 1.4248 key resistance (2021 high).
