The last week featured central bank decisions from most central banks across the globe. The RBA in Australia implemented a back-to-back rate increase in order to curb inflation. Other Banks left rates mostly unchanged. Especially the Bank of England remains in focus as all members of the committee opted to leave rates unchanged.

In general investors seem to favor save- haven assets for now. With the war against Iran still being fought on both sides especially the implications in regards to the economy seems to grow further. While in some place energy prices and in particular the price of oil keeps rising also shortages in regards to jet fuel might offer serious problems medium term. Not only for global transport but in particular air cargo prices have already moved substantially higher. The repair of damaged oil plants will take months.

Meanwhile US President Trump sets a 48- hour deadline to open the Strait of Hormuz. The escalation is visible in all markets as most assets keep losing value currently. While stocks are falling also bond prices turning lower, as yields are rising. Not only the recent strength of the Dollar kept pushing precious metals prices lower but it seems that investors try to build up cash reserves. A usual sign of the early stage when market face a bigger correction.

Important events this week:

– UK – Flash Manufacturing Pmi Data– The Bank of England did not adjust rates last week and offered a rather “hawkish hold after all. This means that the Pound might be poised to gear up fresh momentum should positive data soon follow. The purchasing managers indexes are expected to come in slightly weaker compared to last month’ reading and hence they might be able to move markets.

GBPUSD weekly chart

The weekly chart above shows that a breakout of the current trading range might be on the cards into either direction. A stronger reading might be able to push the GBP higher and could then push the currency pair above the technical resistance zone at 1.3450. Vice versa a lower reading, which would be in line with the recent trend of the British economy might move the GBPUSD pair lower. The recent strength of the Dollar might then gear up momentum again, if the market is able to break the 1.3200 support zone. The pmi indexes will be released on Tuesday, 24^th of March at 10:30 CET.

– AU – consumer price index– the Royal Bank of Australia has now increased interest rates twice in a row to fight the growing risk of rising inflation. The economy in China keeps also weakening slightly, which might cause the AUD to lose some pace. As we previously wrote, the market looks set for a bearish turnaround as the weekly candlestick pattern suggests. A clear break of the 0.7000 zone is needed, however, in order to push this market lower. 

AUDUSD daily chart

Based on the daily chart above, the rising 50- moving average might also act as a support zone if the price falls. A break of that level might occur, though, if consumer prices fall more than anticipated. The annual CPI rate currently sits at 3.8% and the monthly growth is expected at 0.4%. The consumer price index will be released on Wednesday, 25^th of March.