Bullish start but gap up | dip and rise | 10871 10803 supportUK 100, DailySPREADEX:FTSEhilsdentradingThe tone has improved considerably over the weekend. Markets are beginning August with a risk-on bias after the US decided to pause further military action against Iran and instead pursue diplomatic talks. That has sent Brent crude down more than 4%, easing inflation concerns and pulling Treasury yields lower. At the same time, coordinated intervention by the US and Japan has strengthened the yen and weakened the dollar, while S&P 500 and Nasdaq futures are trading higher ahead of a week dominated by US employment data. The FTSE starts the new month in a constructive position. The sharp fall in oil prices removes some support for the energy majors, but it also reduces inflation concerns and improves the outlook for sectors such as consumer stocks, travel, industrials and financials. The index has demonstrated impressive resilience throughout the recent geopolitical volatility, and today's backdrop should allow broader participation rather than relying purely on energy stocks. What I'm Watching The first thing I want to see is whether buyers defend any early retracement after the opening rally. If the FTSE continues producing higher lows during the morning session, I think another move towards the recent highs remains the higher-probability outcome. Financials and industrials could become the leadership sectors today if oil continues easing. Trading Plan I still favour buying controlled pullbacks. I don't want to chase an opening gap higher. Instead, I'll wait for price to retrace into support before looking for bullish confirmation. As long as support holds, I continue to favour the long side.