Weekly Outlook | US – Iran War Back In Focus
There are a number of important news events on the agenda this week. Whilst the conflict between the US and Iran is back in the spotlight, current news events should also be taken into account. Iran stated that they will not allow the Strait of Hormuz to be fully reopened. The conflict is hence far from being solved, despite the potential of another round of talks anytime soon. That might as well strength the Dollar and harm the positive risk sentiment.
The consumer price indices from Canada, New Zealand and the United Kingdom might already begin to show some impact of the geopolitical situation as we examine below. Furthermore, also the purchasing manager indices from Germany and the UK should be considered. A deviation of the expected figures might then cause markets to react volatile.
Furthermore, the Senate hearing of Fed Chair-designate Warsh could provide further insights into his policy and will hence be interesting. In Washington he will give insights into Banking, Housing and Urban affairs.
Important events this week:
– UK- Consumer price index- The consumer price index in the UK is expected to rise from 3.0% to 3.3%. Prices have been falling since December last year and the trend is expected to reverse for now. In general, rising prices support a currency as this might cause a central bank to hike interest rates. Due to the war between the United States and Iran the inflation might indeed rise. Whether this will already be reflected in this report might be in question, though. On the other hand, the Dollar might gear up steam again, should the war with Iran escalate further.

GBPUSD, daily chart
The daily chart of the GBPUSD currency pair shows, that the market is stuck just below a technical resistance zone. Should the level of 1.3575 hold, the recent bullish trend might come to a close, with prices falling again. The initial target for the market might then be the 50- moving average zone at 1.3430. The data will be released on Wednesday, 22nd April at 08:00 CET.
– EU- German PMI data- the purchasing managers’ indices from Germany are important as they provide valuable insights into Europe’s largest economy. While the manufacturing pmi is expected to decline from 52.2 to 51.3 the services number is expected to weaken to 50.4 from 50.9. A figure below the 50- level generally means contraction. Germany’s DAX index is famous for investors in the country but also offering insights into the economy. Most companies generate their business outside of Germany, while global trading conditions as well as the purchasing manager index offer valuable insights. Especially a deviation from the expected data release might cause volatile moves of the DAX.

DAX (GER40), weekly chart
In the past two weeks the index was rising but is now trading at a technical resistance level. A clear break of the 24.650 zone is needed in order to offer more upside, which might occur if numbers come in positive. Vice versa an even lower release might also trigger a selloff in this market, supported by the current geopolitical tensions. The pmi data will be released on Thursday, 23rd April at 09:30 CET.