1 – 8 March 2026
The US dollar continued its retreat during the week of March 2-6, 2026, pressured by geopolitical uncertainty following US-Israel attacks on Iran and anticipation of further Fed rate cuts. EUR/USD consolidated above 1.1200 while GBP/USD extended its recovery from November lows. USD/JPY pushed toward yearly highs near 156 as BoJ maintained rates at 0.75% in February. Risk sentiment remained fragile amid crude oil surging 30% year-to-date.
EUR/USD Spot Rate: 1.1285
▲ +0.42% 🔵 Outlook: Neutral | Support: 1.1200 · Resistance: 1.1500
Week in Review
The euro held firm above the 1.1200 level as USD weakness continued to dominate price action. German fiscal support and narrowing interest rate differentials provided structural support, while traders positioned for further Fed easing in 2026. The pair consolidated recent gains with minimal volatility.
Key Drivers: Fed dovish pivot with 1-2 cuts expected in 2026 · ECB maintaining rates at current levels through year · Germany fiscal stimulus supporting eurozone growth
Forward Outlook
Technical resistance at 1.1500 remains the key upside target for bulls in Q2 2026. The pair’s trajectory depends heavily on USD direction rather than intrinsic euro strength. Expect range-bound consolidation until Fed policy clarity emerges.
GBP/USD Spot Rate: 1.3245
▲ +0.38% 🟢 Outlook: Bullish | Support: 1.3100 · Resistance: 1.3400
Week in Review
Sterling extended its recovery from November’s oversold conditions near 1.3000, outperforming both EUR/USD and the broader dollar complex. The pair demonstrated trending capacity over recent months, benefiting from UK economic resilience. Technical momentum remains constructive following January’s surge.
Key Drivers: UK growth resilience versus US slowdown expectations · Cable showing strongest trend among major dollar pairs · Dollar weakness providing tailwind for sterling gains
Forward Outlook
GBP/USD remains the preferred venue for expressing USD weakness given its superior trending characteristics. Next resistance targets emerge at 1.3400-1.3500. Monitor UK data for any signs of economic softening that could reverse bullish momentum.
USD/JPY Spot Rate: 156.25
▲ +0.71% 🔵 Outlook: Neutral | Support: 154.00 · Resistance: 160.00
Week in Review
The dollar climbed to fresh 2026 highs against the yen despite broader USD weakness elsewhere, as the BoJ held rates unchanged at 0.75% in February following December’s hike. The pair continues to hold higher lows, maintaining a bullish technical structure. Japanese authorities remain wary of intervention as the 160.00 threshold approaches.
Key Drivers: BoJ pausing rate hikes in February maintaining policy at 0.75% · Widening yield differentials favoring dollar positions · Intervention risk rising as 160.00 level approaches
Forward Outlook
Near-term volatility expected around BoJ rate decision timing in Q2. The 160.00 level represents a critical line-in-the-sand for Japanese authorities. Technical outlook remains bullish but vulnerable to policy surprises or intervention risk at current elevated levels.
AUD/USD Spot Rate: 0.6628
▲ +0.55% 🟢 Outlook: Bullish | Support: 0.6600 · Resistance: 0.6706
Week in Review
The Australian dollar consolidated above the 0.6600 multi-month downtrend resistance level, tackling the 200-week moving average at 0.6643. China’s Two Sessions meeting on March 4-5 provided modest support with 5% GDP growth target reaffirmed. The pair held above 0.6420 support zone established since August.
Key Drivers: China Two Sessions confirming 5% GDP growth target · Broader USD weakness lifting commodity currencies · Technical breakout above multi-month downtrend resistance
Forward Outlook
Recovery toward 0.6940-0.6950 by mid-2026 remains the base case scenario. Immediate resistance at the September 0.6706 high needs to be cleared. Monitor China stimulus implementation and commodity price dynamics for directional cues.
EUR/GBP Spot Rate: 0.8520
→ +0.04% 🔵 Outlook: Neutral | Support: 0.8400 · Resistance: 0.8600
Week in Review
The cross traded in a narrow range as both currencies benefited from dollar weakness. Sterling’s marginal outperformance kept EUR/GBP under modest pressure. Relative monetary policy divergence remains limited with both central banks on hold for the foreseeable future.
Key Drivers: Limited monetary policy divergence between BOE and ECB · Both currencies supported by dollar weakness dynamics · UK growth resilience versus eurozone fiscal uncertainty
Forward Outlook
Expect continued range-bound trading between 0.8400-0.8600 absent significant shifts in relative growth or monetary policy outlooks. Sterling may retain a modest edge if Fed cuts materialize faster than BOE adjustments.
⚠️ Risk Events — Next Week
| Event | Date | Impact | Affected |
|---|---|---|---|
| US Non-Farm Payrolls (March) | March 7, 2026 | high | USD, all majors |
| ECB Policy Meeting Minutes | March 10, 2026 | medium | EUR |
| Bank of Japan Governor Ueda Speech | March 11, 2026 | high | JPY |
| UK GDP Monthly Data | March 12, 2026 | medium | GBP |
| China CPI & PPI Data | March 9, 2026 | medium | AUD, CNH |
Analyst Note
Middle East geopolitical tensions and energy price shocks dominate the near-term risk landscape, with crude up 30% year-to-date creating stagflation concerns. President Trump’s limited appetite for prolonged conflict ahead of November midterms may contain further escalation. Dollar weakness remains the dominant theme but faces headwinds if energy-driven inflation complicates Fed easing path.
This report is for informational purposes only and does not constitute financial advice. Published by Elven Financial Research.