23 to 29 March 2026
The U.S. dollar showed broad strength during the week of March 23-27, 2026, driven by Middle East energy concerns and safe-haven flows. GBP/USD declined -2.01% to 1.34, while USD/JPY rallied +1.39% to 158. EUR/USD remained under pressure as European energy vulnerability weighed on sentiment, and AUD/USD edged up +0.38% to 0.71 despite dollar firmness.
EUR/USD Spot Rate: 1.05
▼ -0.85% 🔵 Outlook: Neutral | Support: 1.0300 · Resistance: 1.0750
Week in Review
The euro surrendered further ground this week as Middle East tensions exposed Europe’s acute energy vulnerability. The pair continues to trade below key resistance levels as geopolitical risks offset otherwise supportive fundamentals including resilient growth and contained inflation.
Key Drivers: Middle East conflict heightening European energy security concerns · Safe-haven dollar demand amid geopolitical uncertainty · Divergent growth expectations favoring U.S. over Eurozone
Forward Outlook
Assuming tensions ease and flows through the Strait of Hormuz normalize, the euro may find support from solid economic fundamentals and ongoing fiscal stimulus. However, any appreciation is likely to remain modest compared to early-2026 expectations, with upside potential capped until energy supply risks fully dissipate.
GBP/USD Spot Rate: 1.34
▼ -2.01% 🔴 Outlook: Bearish | Support: 1.3300 · Resistance: 1.3700
Week in Review
Sterling suffered its worst weekly decline in months, falling sharply from 1.37 to 1.34 as risk aversion drove capital toward the dollar. The selloff reflects broader EM and developed currency weakness against the greenback amid heightened geopolitical uncertainty.
Key Drivers: Intensifying Middle East crisis prompting risk-off flows · Strong dollar momentum across all major pairs · Deteriorating risk sentiment weighing on growth-sensitive currencies
Forward Outlook
Cable faces continued headwinds while geopolitical tensions persist, though underlying U.K. fundamentals remain relatively stable. A sustained break below 1.33 could trigger further technical selling toward 1.30, while any easing of global tensions may support a recovery attempt toward 1.37.
USD/JPY Spot Rate: 158
▲ +1.39% 🔵 Outlook: Neutral | Support: 156.00 · Resistance: 160.00
Week in Review
The dollar advanced to 158 against the yen, continuing its grind higher as Japanese political uncertainties and carry trade dynamics outweigh traditional safe-haven yen demand. The pair remains elevated despite periodic intervention concerns from Tokyo.
Key Drivers: Ongoing Japanese political instability suppressing yen strength · Persistent carry trade flows favoring dollar-yen longs · Widening U.S.-Japan monetary policy differentials
Forward Outlook
The 160 level represents a critical threshold where Finance Ministry intervention becomes probable, potentially capping near-term upside. Traders seeking JPY weakness may find better opportunities in EUR/JPY or GBP/JPY if dollar strength moderates, though any sharp risk-off event could trigger violent carry unwinds.
AUD/USD Spot Rate: 0.71
▲ +0.38% 🔵 Outlook: Neutral | Support: 0.7000 · Resistance: 0.7250
Week in Review
The Australian dollar posted modest gains to 0.71 despite broad dollar strength, supported by resilient commodity prices and relatively stable risk sentiment toward Asia-Pacific assets. The aussie has shown notable resilience compared to other G10 currencies.
Key Drivers: Commodity price support offsetting dollar strength · Stable China-related growth expectations · Fed repricing dynamics creating volatility across dollar pairs
Forward Outlook
The AUD faces a challenging environment with geopolitical risks and potential dollar strength limiting upside, though commodity fundamentals provide a floor. A sustained move above 0.72 would require easing global tensions and clearer Fed easing signals, while breaks below 0.70 could accelerate on risk-off flows.
EUR/GBP Spot Rate: 0.7836
▲ +0.95% 🔵 Outlook: Neutral | Support: 0.7700 · Resistance: 0.8000
Week in Review
The euro outperformed sterling on a relative basis this week as the pound’s sharp decline against the dollar exceeded euro weakness. Cross-rate dynamics were dominated by differential safe-haven flows rather than fundamental divergence between the two economies.
Key Drivers: GBP weakness against USD exceeding EUR/USD decline · Relative safe-haven positioning favoring euro over sterling · Technical rebound from oversold levels supporting the cross
Forward Outlook
EUR/GBP trading will likely remain range-bound between 0.77-0.80 absent major policy divergence between the ECB and Bank of England. Cross movements will continue to be driven primarily by differential dollar exposure rather than bilateral factors between the eurozone and U.K.
⚠️ Risk Events — Next Week
| Event | Date | Impact | Affected |
|---|---|---|---|
| U.S. Core PCE Price Index | March 31, 2026 | high | USD, EUR/USD, GBP/USD |
| Eurozone CPI Flash Estimate | April 1, 2026 | high | EUR, EUR/USD, EUR/GBP |
| U.S. ISM Manufacturing PMI | April 1, 2026 | medium | USD, AUD/USD |
| Middle East Geopolitical Developments | Ongoing | high | All major pairs |
Analyst Note
The week’s price action confirms that geopolitical risk premiums are overwhelming fundamental analysis in the near term. Middle East energy security concerns present asymmetric risks to euro area currencies, while dollar safe-haven demand persists despite stretched valuations. Traders should monitor Strait of Hormuz developments closely, as any escalation or de-escalation will drive immediate repricing across all major pairs.
This report is for informational purposes only and does not constitute financial advice. Published by Elven Financial Research.