Market Sector Scanner: Markets Stay Risk-Off as Iran Conflict and Inflation Pressures Build
Ongoing conflict in Iran and risks to oil supply have kept prices near $100, while stronger U.S. inflation data has shifted expectations toward higher interest rates. The U.S. dollar remains strong, pushing USD/JPY toward 160 as global equities weaken and gold declines sharply. With risk sentiment fragile, traders are closely watching central banks, key economic data, and developments in the Middle East this week.
Markets were driven by the ongoing conflict in Iran, with concerns it may last longer than expected. Oil prices were volatile and tested the $100 level as traders focused on possible supply disruptions through the Strait of Hormuz. Higher-than-expected U.S. inflation data added to concerns, pushing expectations toward higher interest rates. Stock markets weakened, with U.S. equities falling for a fourth straight week as inflation and rate expectations weighed on sentiment. The U.S. dollar remained strong, while gold dropped below $5,000, falling around 10% as speculative selling increased and the strong dollar pressured prices.
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Key Events Calendar for March 23 – March 27
Forex Market
USD/JPY
Last Week Recap
USD/JPY continued to follow oil price movements, pushing higher and testing the 160 level. Comments from the Bank of Japan governor about still aiming to raise interest rates caused a brief pullback, but this was temporary as the market refocused on expectations of higher U.S. interest rates.
Technical Picture
The weekly close back above the 10-day moving average confirms the uptrend remains in place, with 160 acting as key resistance. Bollinger Bands are wide, showing strong volatility but no clear signal at the moment.
Outlook This Week
The uptrend is starting to slow. Unless oil prices move back above $100, range trading between 158 and 160 looks like the best short-term strategy.
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GBP/JPY
Last Week Recap
GBP/JPY continued its uptrend last week despite weaker-than-expected UK employment data, as the yen remained weak. The Bank of England kept interest rates unchanged but indicated that rates could rise if inflation increases further due to higher oil prices.
Technical Picture
The 10-day moving average continues to point higher, showing the uptrend remains intact. The market has also recovered from the recent Bollinger Band sell signal, suggesting buying interest is still present.
Outlook This Week
The market is likely to move sideways this week as it looks for direction. Range trading appears to be the best short-term strategy.
EUR/USD
Last Week Recap
The ECB kept interest rates unchanged at its latest meeting but signaled a willingness to raise rates if higher oil prices continue to push inflation higher. This supported the euro, with EUR/USD strengthening toward the end of the week.
Technical Picture
The lower Bollinger Band triggered a buy signal earlier in the week, and a close back above the 10-day moving average suggests the recent downtrend from early March may have ended.
Outlook This Week
With the downtrend now easing, the market is likely to trade sideways around the key 1.1500 level. Range trading opportunities may be the preferred short-term strategy this week.
Equities
U.S. Stock Market
Last Week Recap
The continued conflict in Iran and rising expectations of higher U.S. interest rates pushed the Nasdaq to new lows for 2026, as investors reduced exposure to risk assets.
Technical Picture
The move to new yearly lows has pushed price below the lower Bollinger Band. However, with the bands still relatively narrow, the market is not yet clearly oversold and may require positive news to trigger a reversal. The 10-day moving average continues to point lower, confirming the downtrend.
Outlook This Week
The downtrend remains strong. As long as the conflict in Iran continues, focusing on selling rallies appears to be the preferred strategy in the current market.
Commodities
Gold
Last Week Recap
Gold failed to rise despite the start of the Iran war, leading to aggressive selling once price broke below the $5,000 level. Rising U.S. interest rate expectations and a stronger U.S. dollar have reduced demand for gold.
Technical Picture
The sharp decline has pushed gold well below the lower Bollinger Band as the market moves toward testing this year’s lows. The 10-day moving average has turned lower, confirming bearish momentum, although there is now a large gap between price and the moving average.
Outlook This Week
The market is now significantly oversold, so short-term traders may look for buying opportunities early in the week if selling slows. However, medium-term traders may prefer to sell strength rather than buy dips, as the fundamental outlook has shifted with rising U.S. interest rate expectations.
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Markets will focus on the Iran conflict this week, as traders increasingly price in a longer war despite recent comments suggesting progress. Equity markets remain under pressure, and any further rise in oil above $100 could trigger panic selling. Economic data is relatively limited, with key releases including global manufacturing PMI, Japan’s policy meeting minutes, and U.S. consumer sentiment, which may provide insight into market direction.
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