No deal: politics defeats business

SP500

Key zone: 7,680 - 7,800

Buy: 7,830 (on a pullback following a correction to 7,700); target 7,950-8,000; StopLoss 7,760

Sell: 7,650 (on strong negative fundamentals); target 7,550; StopLoss 7,720

The agreement between Iran and Oman, which could have increased oil supplies, lowered crude prices, and reduced demand for the U.S. dollar as a safe-haven asset, has once again been postponed. Along with it, the market has also postponed its hopes for easing inflation risks and a more accommodative Federal Reserve policy.

The promised reopening of the Strait of Hormuz did not take place. Tehran publicly accused the United States of political interference, emphasizing that negotiations with Oman are a bilateral process and cannot proceed under the threat of military pressure.

Washington continues to combine statements about its willingness to negotiate with tough warnings. This approach only reduces the likelihood of reaching a compromise.

Another warning signal came in the form of new explosions near a tanker transiting the Strait of Hormuz. The exact cause of the incident has not yet been determined, but the market has once again been reminded of how fragile the situation remains.

At the same time, Iran warned the Persian Gulf states that any new U.S. attack would trigger retaliatory strikes against critical regional energy infrastructure. According to five sources, Tehran is attempting to raise the cost of any potential military escalation for Washington's allies.

Let's recap.

Another problem for the U.S. dollar is emerging in parallel. Despite elevated U.S. Treasury yields and hawkish comments from Federal Reserve officials, the dollar has failed to deliver the expected gains. Investors continue reducing their exposure to both U.S. Treasuries and the dollar simultaneously. This is an alarming signal for the entire financial system.

Following reports of regular private contacts between Kevin Warsh and Donald Trump, market confidence in the independence of the Federal Reserve's leadership has weakened noticeably. The deeper investors analyze the situation, the more cautious they become about the market outlook.

• The U.S. Dollar Index (DXY) remains trapped between 99.68 and 99.82, unable to choose a direction without a strong fundamental catalyst. A rebound from 99.68 toward 99.82 could trigger a short-term correction lower in the major currency pairs. A break below 99.68 would strengthen demand for the euro and the British pound. Selling the major currencies becomes justified only if DXY secures a move above 99.82.
• Brent crude has fallen to $78.30, losing roughly 11% in three days. The market is still pricing in the possibility of a diplomatic solution. The key resistance zone lies between $80 and $82. A break below $78 could accelerate the decline toward $75. A recovery above $80 would signal the return of the geopolitical risk premium.
• Gold remains under pressure. A break below the $4,200 support level would open the way toward $4,000, while a sustained move above $4,280 would make the area above $4,350 the next upside target.
• Bitcoin is attempting to recover, but its technical structure remains fragile. Support is located at $64,000, while resistance stands at $65,000. A confident move above $65,000 is likely only if DXY falls below 99.68 and the U.S. dollar continues to weaken.
• The S&P 500 is consolidating after reaching fresh highs in the 7,730–7,750 range. At this stage, the market has not developed sufficient conditions for a meaningful correction.

The market is caught between two scenarios: expectations of a diplomatic breakthrough and the risk of a new military escalation. The postponement of the agreement does not mean it has collapsed, but neither does it justify expectations of a rapid decline in the geopolitical risk premium. The biggest mistake right now is trading expectations rather than confirmed signals.

So, what does this mean?

The market does not believe headlines—it waits for actions. Preserving capital is currently more important than trying to predict the next political move. Every new statement can be contradicted by a new threat just hours later.

As long as DXY remains within the 99.68–99.82 range, opening new positions is premature.

Until DXY breaks out of its current range, shipping through the Strait of Hormuz is fully restored, or a new escalation occurs, none of the scenarios has gained a decisive advantage. A trader's task is not to predict the future, but to join the move once the market has clearly chosen its direction.

So we act wisely and avoid unnecessary risks.

Profits to y’all!