The economic calendar for the upcoming week is not filled with important events for the EUR/USD pair. It mainly includes secondary macroeconomic reports and speeches by Federal Reserve representatives, most of whom have recently taken a very cautious position, using vague phrasing. The only point of interest is the American Producer Price Index, which we will discuss separately. Overall, we can expect a week that is not very informative in economic terms, which, however, is more than compensated for by the geopolitical agenda.

We will immediately feel the consequences of the failed negotiations between the United States and Iran, which just took place in Islamabad, on Monday. Unfortunately, the parties failed to find a compromise on any key issue. According to Iranian media, US representatives insisted on the export of enriched uranium stocks from Iran. Tehran, in turn, categorically rejected this condition, as well as the unconditional unblocking of the Strait of Hormuz. The US called these issues "red lines" that Iran did not accept. American media (in particular, the publication Axios) reported similar details, which speaks to their validity.

The fact that the US and Iran did not reach an agreement was also stated by the Vice President of the United States, JD Vance. According to him, this is "bad news primarily for Tehran." Immediately after a four-minute press conference, Vance left Islamabad for Washington.

It is important to remember that the upward momentum in EUR/USD last week was primarily driven by expectations of peace negotiations that could end the Middle Eastern conflict. As we can see, this did not happen, so on Monday the sentiment among traders will be entirely different: anxiety will return to the market, and demand for risky assets will sharply decline. The safe dollar will again take center stage amid rising anti-risk sentiment.

And yet, it is still too early to talk about a resumption of the dollar rally, despite the obvious prerequisites. After all, the failure of the negotiations does not mean a resumption of war. At first glance, this sounds illogical, but there is some logic in it.

According to experts interviewed by The New York Times, the United States will not act linearly, as a return to combat operations "will have very severe domestic political consequences for Donald Trump" - due to the unpopularity of war and the destabilization of the American economy. In addition, a resumption of airstrikes or (even more so) the start of a ground operation could trigger a collapse of global markets and an increase in inflation, which would hit the US president even harder, and by extension, the Republican Party.

It should be noted that official US representatives did not say they were withdrawing from the negotiations. Vance, while stating that there were no results from the negotiations, did not answer whether military actions against Iran would resume after the "Islamabad failure." The Iranian government, in turn, published a post stating that the negotiations would continue. According to Foreign Minister Esmail Baghaei, the failure of the negotiations does not mean a definitive refusal of dialogue: the success of further diplomacy, in his opinion, depends on the "seriousness of the other side's intentions" and their willingness to abandon "excessive and unacceptable demands."

On the other hand, Trump, judging by his statements, is considering the possibility of further escalation, although in a somewhat different context. On his TruthSocial page, he reshared an article about the "president's trump card" - a potential naval blockade of the Strait of Hormuz. The publication states that American military forces may attempt to block the export of Iranian oil by sea "to increase pressure on Tehran without direct military confrontation." According to the author of the article, such a move is an alternative to a large-scale operation, "and a way to limit key sources of Iranian income." Judging by his resharing of this material, the head of the White House does not rule out this scenario.

However, such a scenario also carries notable risks (in particular, rising energy prices) and does not guarantee a quick resolution of the conflict. Therefore, the option of further negotiations cannot be excluded, especially since the parties have not publicly stated their withdrawal from the negotiation process.

Still, considering the recent events, a southward corrective pullback in the EUR/USD pair to around the 16th figure is likely. However, it is still too early to speak of a trend reversal: everything here will depend on the intentions and statements of official representatives. If Trump decides to implement a maritime blockade of Iran, anti-risk sentiments will rise again in the market, and the safe dollar will see increased demand. In this case, the EUR/USD pair could return to the 15-14 range. But if the parties refrain from escalation and announce the continuation of the dialogue, the pair will likely drift within the 16th figure.

Moreover, macroeconomic reports will play a secondary role. The only point of interest is the Producer Price Index, which will be published in the US on Tuesday, April 14. A contradictory dynamic is expected here: the overall PPI is projected to accelerate sharply in March (from 3.4% to 4.1%), while the core index is expected to remain at the February level, i.e., at 3.9%. The release will provide substantial support to the dollar if the upward dynamics are demonstrated not only in the overall PPI but also in the core PPI.

Thus, despite the "dryness" of the economic calendar, we can expect a rather volatile week, where the trading will be dictated not by macro data but by geopolitical events.