Rubio Lifts Oil 3%; ECB in Focus - CPT Markets

Market Wrap-up: Oil Extends Rally as Rubio's Remarks Fuel Supply ConcernsMarkets traded with limited volatility in the previous session as investors remained focused on geopolitical developments in the Middle East. Oil prices extended their gains after US Secretary of State Marco Rubio stated that Tehran was not genuinely committed to reaching an agreement to end the conflict.

The comments pushed international benchmark Brent crude more than 3% higher to settle at USD 94.07 per barrel, while US WTI crude also advanced around 3% to close at USD 86.83 per barrel.

Rubio also reaffirmed that US forces would continue safeguarding shipping through the Strait of Hormuz. Meanwhile, US President Donald Trump warned that Washington could target Iranian infrastructure if tensions continue to escalate.

At the same time, Yemen's Iran-backed Houthi forces announced a ban on vessels transporting or loading cargo at Saudi Arabian ports. The move threatens Saudi Arabia's oil export operations, which have increasingly relied on Red Sea routes to offset disruptions through the Strait of Hormuz.

Despite escalating geopolitical risks, the US Dollar Index eased slightly to 101.02, allowing gold to benefit from safe-haven demand and the weaker dollar. The precious metal gained around 1% to close at USD 4,160 per ounce.

Looking ahead, markets will focus on the US Initial Jobless Claims report. Claims are expected to rise to 212,000 from 208,000, although the overall level would still indicate a resilient labor market with limited layoffs.

Attention will also turn to the European Central Bank, which is widely expected to leave its main refinancing rate unchanged at 2.40% and its deposit facility rate at 2.25%.

Following the policy decision, markets will closely watch ECB President Christine Lagarde's press conference. With investors already pricing in a September rate hike, any hawkish guidance on inflation and the future policy path could become the primary driver for the euro in the near term.

 XAU/USD: Gold Gains on Weaker Dollar and Risk-Off Demand 

Key takeaway:

Gold climbed to a two-week high on July 22, supported by technical buying and renewed safe-haven demand as investors monitored diplomatic efforts surrounding the Middle East conflict while awaiting next week's Federal Reserve policy meeting for further guidance on the interest rate outlook.

According to a Reuters survey, the Fed is widely expected to leave interest rates unchanged for the remainder of 2026, while market pricing continues to reflect expectations for two rate hikes before the end of March next year.

Technical Outlook:

Daily Bias: Bearish with Rebound Potential

Support: 4,104

Resistance: 4,160

Oil: WTI Climbs Above $86 as Middle East Risks Intensify 

Key takeaway:

WTI crude gained more than 3% on July 22 after US President Donald Trump renewed threats to strike Iran's bridges and power facilities, while Secretary of State Marco Rubio said Tehran was not seriously pursuing an agreement to end the conflict.

Analysts at TD Securities believe supply and demand fundamentals are increasingly supportive of oil prices remaining within the USD 90-100 per barrel range. Oil flows through the Strait of Hormuz have slowed, while supply routes via the Red Sea continue to face elevated disruption risks.

Technical Outlook:

Daily Bias: Bearish

Support: 84.61

Resistance: 88.60

DXY: US Dollar Slips as Traders Await Key Event Risks 

Key takeaway:

The US Dollar Index edged lower as investors awaited Thursday's US Initial Jobless Claims report.

Initial Jobless Claims are expected to increase to 212,000 from 208,000, although the projected level continues to point to limited layoffs and a resilient labor market.

Meanwhile, overall risk sentiment remained fragile after President Donald Trump warned that Washington could target Iranian infrastructure if another vessel is attacked in the Strait of Hormuz.

Technical Outlook:

Daily Bias: Bearish with Rebound Potential

Support: 100.86

Resistance: 101.20

EUR/USD: Euro Holds Steady Ahead of ECB Guidance on Future Rate Path 

Key takeaway:

The euro traded cautiously as elevated energy prices reinforced expectations for a more hawkish Federal Reserve.

The main focus today will be the European Central Bank's latest monetary policy decision.

The ECB is widely expected to leave its deposit facility rate unchanged at 2.25%.

Following the announcement, market attention will shift to ECB President Christine Lagarde's press conference for guidance on inflation and the policy outlook.

Technical Outlook:

Daily Bias: Neutral

Support: 1.14060

Resistance: 1.14500

USD/JPY: Japanese Yen Strengthens on Hawkish BoJ Expectations 

Key takeaway:

The Japanese yen strengthened as markets continued to price in a more hawkish Bank of Japan and the possibility of official currency intervention.

The Bank of Japan has increasingly signaled a shift away from its ultra-accommodative monetary policy, with policymakers indicating further progress toward policy normalization.

Currency markets have raised expectations for another BoJ rate hike in October after the central bank increased its policy rate to 1.0% in June.

Meanwhile, Japanese Finance Minister Satsuki Katayama has reiterated that authorities stand ready to take appropriate and decisive action if necessary.

Technical Outlook:

Daily Bias: Bullish with Correction Risk

Support: 162.84

Resistance: 163.50

Geopolitical tensions remain the dominant market driver, keeping crude oil prices elevated as supply risks across the Strait of Hormuz and the Red Sea continue to support the energy complex.

Higher oil prices have reinforced inflation concerns, but the US dollar softened modestly as investors refrained from adding fresh long positions ahead of key event risks, allowing gold to extend its safe-haven rally.

Equity markets remained cautious while major currency pairs traded within relatively tight ranges.

Today's focus shifts to the US Initial Jobless Claims report and the ECB policy decision. While the ECB is widely expected to keep rates unchanged, President Christine Lagarde's guidance will be critical in shaping expectations for September.

Markets will also assess whether incoming US labor market data supports the current policy outlook or prompts another repricing of interest rate expectations.

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