The past week has clearly demonstrated that when geopolitics enters a hot phase, technical analysis takes a backseat to crowd psychology. Markets are in a state of high fever, reeling from the blockade of the Strait of Hormuz to critical US employment data. As regional tensions escalate, only systematic players are managing to stay afloat.
The US Dollar Index (DXY) is holding steady at 99.095, eyeing a weekly gain of 1.5%. It's strongest performance since November 2024.
The fear factor: Escalating conflict—including strikes on Tehran and retaliatory attacks on infrastructure in Bahrain and Cyprus—has triggered a flight to quality, driving investors toward the dollar. Even profit-taking ahead of the NFP report failed to dampen the overall bullish sentiment.
Today’s intrigue of the day: The market is bracing for the Non-Farm Payrolls (NFP) report. Forecasts suggest a sharp deceleration to 59K (down from 130K in January). While a weak figure might cause a temporary dip, the dollar’s "safe-haven" status is expected to quickly push it back toward local highs.
European currencies have become hostages to the ongoing oil rally.
EUR/USD: The pair is trading near 1.1607, down approximately 1.7% for the week. High energy prices are weighing more heavily on the EU economy than interest rate expectations. Despite Eurozone inflation exceeding forecasts, the data brings little optimism as the risk of stagflation rises.
GBP/USD: The pound is holding at 1.3363, with weekly losses of around 1%. Surging energy costs have emerged as a "black swan" for the British government, leaving traders concerned that the Bank of England is trapped between runaway inflation and declining manufacturing output.
The commodities market currently serves as the primary "frontline report" for global stability.
Brent crude: A massive rally is underway. Prices have stabilized around $85.50, marking a 20% surge in just one week. The blockade of the Strait of Hormuz has cut off 20% of global supply. Washington's efforts to curb prices by tapping into reserves have yielded only temporary relief.
Gold: The precious metal is showing extreme volatility near the $5,000 mark. While the risk of a major war supports prices, a dominant dollar and rising US bond yields are acting as significant headwinds to the rally.
Japanese yen (JPY): USD/JPY has consolidated at 157.55. The weak yen has become a critical issue, inflating the cost of energy imports and effectively draining the Japanese economy. Verbal interventions from the Bank of Japan have so far failed to gain traction in the market.
Australian dollar (AUD): AUD/USD briefly touched 0.7035 but is ending the week in the red. As a risky currency, the Aussie is often the first to fall when geopolitical panic sets in.
The events of this week confirm a harsh truth—the current market is far too aggressive for those who rely on a gut feeling when making their trades. When oil jumps 20% in five days, and currency pairs slice through support levels like paper, your greatest enemy is not the market maker, but your own emotions.
Successful trading in 2026, especially for those who wish to manage major capital in prop trading, is impossible without having a solid safety net. Your ego and your heart rate should never have access to the "Buy" button when the Middle East is in such turmoil as it is now.
Professional capital management begins where the human factor ends and algorithmic risk management takes over. You need a clear action plan to weather this storm and maintain your status as an asset manager.
With this in mind, we have created Survival Protocol, a PDF guide outlining 5 critical risk management settings to prevent emotional and fatal mistakes.
Don’t let the market catch you off guard. Grab your safety settings now.
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