16 – 22 March 2026
EUR/USD fell 0.42% to 1.1450, GBP/USD declined 0.55% to 1.3265, USD/JPY rose 0.38% to 159.40, and AUD/USD dropped 0.28% to 0.7094 during the week of March 16-20, 2026. Geopolitical risk from the US-Iran conflict kept the dollar bid as safe-haven demand collided with rate-cut expectations. The Federal Reserve, Bank of England, and Bank of Japan all announced rate decisions within a 48-hour window on Wednesday-Thursday, creating exceptional volatility across major pairs.
EUR/USD Spot Rate: 1.1450
▼ -0.42% 🔴 Outlook: Bearish | Support: 1.1380 · Resistance: 1.1543
Week in Review
The Iran premium kept EUR/USD under pressure as the pair declined to 1.1450 from prior week levels. Elevated energy prices disproportionately hurt energy-importing economies including the Eurozone, weighing on the single currency despite resilient economic fundamentals.
Key Drivers: Iran conflict driving energy import costs higher · Safe-haven USD demand amid geopolitical tensions · FOMC dot plot uncertainty ahead of Wednesday decision
Forward Outlook
If the FOMC dot plot removes one of the projected 2026 cuts, EUR/USD would test 1.1380. Conversely, if the dot plot signals two cuts for 2026 or Powell turns more dovish, EUR/USD would reclaim 1.1543 and possibly 1.1600. Technical support sits at 1.1380 with upside resistance at 1.1543.
GBP/USD Spot Rate: 1.3265
▼ -0.55% 🔴 Outlook: Bearish | Support: 1.3200 · Resistance: 1.3480
Week in Review
GBP/USD declined 0.55% to 1.3265, marking the weakest performance among G10 majors for the week. Sterling faced dual headwinds from dollar strength and energy vulnerability concerns, though the Bank of England’s hawkish bias provided partial support versus the euro.
Key Drivers: BoE rate decision Wednesday – hold expected with split vote · UK energy import dependence heightening inflation risks · USD safe-haven flows dominating sentiment
Forward Outlook
A hawkish FOMC would push GBP/USD below 1.3200, while a dovish outcome would see recovery toward 1.3480+. The BoE vote split on Thursday will determine whether Cable can stabilize or extends losses. Key technical level at 1.3200 now under immediate threat.
USD/JPY Spot Rate: 159.40
▲ +0.38% 🔵 Outlook: Neutral | Support: 158.20 · Resistance: 160.00
Week in Review
USD/JPY rose 0.38% to 159.40, approaching the psychologically critical 160.00 level. Safe-haven flows benefited both USD and JPY, though the interest rate differential kept USD/JPY supported despite dual safe-haven dynamics.
Key Drivers: BoJ rate decision Thursday – hold expected with hawkish tone · 160.00 intervention threshold approaching · Oil-driven inflation supporting yield differentials
Forward Outlook
If the FOMC removes a projected 2026 cut, USD/JPY would challenge 160.00, risking Ministry of Finance intervention. The BoJ’s messaging on wage growth and inflation will be critical. Risk/reward skews negative above 159.50 given intervention history.
AUD/USD Spot Rate: 0.7094
▼ -0.28% 🔵 Outlook: Neutral | Support: 0.7050 · Resistance: 0.7147
Week in Review
AUD/USD fell 0.28% to 0.7094, outperforming EUR and GBP despite the decline. Elevated energy prices provided a secondary tailwind for AUD via higher commodity prices globally, partially offsetting the broader dollar strength.
Key Drivers: Commodity price strength from oil surge providing support · China economic data stabilization lifting sentiment · USD safe-haven demand limiting upside
Forward Outlook
A dovish FOMC would push AUD/USD back toward 0.7147, while hawkish Fed rhetoric would test 0.7050 support. The Aussie’s commodity linkage and China proxy status make it vulnerable to risk-off flows, but energy prices provide a floor. Tactical range: 0.7050-0.7147.
EUR/GBP Spot Rate: 0.8631
▲ +0.13% 🔵 Outlook: Neutral | Support: 0.8600 · Resistance: 0.8680
Week in Review
EUR/GBP edged higher by approximately 0.13% to 0.8631 as the pound’s underperformance gave the euro relative strength within G10. The divergence in BoE and ECB policy expectations continues to narrow as UK energy vulnerability concerns offset the BoE’s hawkish stance.
Key Drivers: BoE-ECB policy divergence narrowing on energy shock · UK fiscal concerns resurfacing amid oil spike · Technical consolidation within established range
Forward Outlook
The pair trades in a well-defined 0.8600-0.8680 range with limited breakout potential until central bank decisions clarify. A more dovish BoE vote split could push toward 0.8680 resistance, while hawkish UK rhetoric would test 0.8600 support. Range-bound conditions likely persist.
⚠️ Risk Events — Next Week
| Event | Date | Impact | Affected |
|---|---|---|---|
| FOMC Rate Decision & Dot Plot | March 18, 2026 | high | All majors – USD, EUR, GBP, JPY, AUD |
| Bank of England Rate Decision | March 19, 2026 | high | GBP, EUR |
| Bank of Japan Rate Decision | March 19, 2026 | high | JPY, USD/JPY crosses |
| US-Iran Conflict Developments | Ongoing | high | Oil-linked pairs (CAD, AUD, NOK), safe havens (USD, JPY, CHF) |
Analyst Note
This week presents a rare convergence of mega-event risk and high-clarity technical setups. DXY would likely break above 99.38 resistance toward 100.16-100.34 if the FOMC removes a projected 2026 cut. Position sizing should be reduced 30-50% given triple central bank risk and geopolitical volatility. Tactical traders should focus on post-decision mean reversion rather than directional bets into the announcements.
This report is for informational purposes only and does not constitute financial advice. Published by Elven Financial Research.