Forex & Currency Watch — 2026-03-29
The US dollar posted its best weekly performance against the major currency complex during the week of March 23–27, driven by an escalating US-Iran conflict and hotter-than-expected domestic economic data, pushing DXY above the 100.00 handle to 100.21. EUR/USD remained bounded above 1.1408 but faces downside pressure, while USD/JPY neared the key 160 resistance level. Traders should watch geopolitical developments closely, as energy-price risks from the Iran conflict and incoming US data could fuel further dollar strength or a sharp reversal.
Forex & Currency Watch — 2026-03-29
Major Pair Snapshot
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EUR/USD: Consolidating above 1.1408, with 1.1666 acting as key cluster resistance (38.2% retracement of 1.2081–1.1408) — bearish bias. Further decline is favored while resistance at 1.1665 holds, and a firm break below 1.1408 would open the door to deeper losses.
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GBP/USD: Under pressure alongside the broader dollar rally, with the dollar posting its best weekly performance against major pairs during the March 23–27 week. The US-Iran conflict and hot domestic data drove greenback outperformance.
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USD/JPY: Nearing the key 160 resistance level, with yen pairs facing pullback risks at technically significant levels. USD/JPY has extended its bullish momentum alongside the broader dollar rally.
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GBP/JPY: Edged higher last week but failed to break through 213.28 resistance and retreated. Initial bias is neutral; a firm break of 213.28 would resume the rise from 207.20 toward 214.98, while a break of 210.77 would bring a deeper fall back toward 209.15.
- EUR/GBP: Range trading continues with the 55-day EMA at 0.8680 intact, keeping the downside bias in place. A firm break of 0.8611 would resume the fall from 0.8863, targeting the 100% projection at 0.8536.
US Dollar Index (DXY)
- Current Level: 100.21 (as of March 27, 2026)
- Weekly Move: Up ~0.31% on March 27 session alone; up 1.86% over the past month. The index moved firmly above the 100.00 level, extending its bullish momentum.
- Key Driver: The US-Iran conflict boosted safe-haven dollar demand, while hotter-than-expected domestic economic data reinforced USD strength. The DXY's sustained break above 100.00 signals continued bullish momentum, per technical analysis.
Central Bank Watch
Bank of Japan (BOJ)
- Latest Action/Statement: No new rate decision this week, but the BOJ's foreign exchange rate data continues to be monitored as USD/JPY approaches the 160 resistance level. Market expectations for continued BOJ rate hikes in 2026 remain in place, with analysts projecting the policy rate could reach 1.0% by year-end.
- Market Impact: USD/JPY nearing 160 has raised the possibility of BOJ verbal intervention, keeping yen pairs volatile. AUD/JPY is also approaching key support levels, adding to cross-yen instability.
- Next Meeting: Scheduled dates available via BOJ monetary policy calendar.
European Central Bank (ECB)
- Latest Action/Statement: The ECB revised medium-term inflation expectations upward at its March 19 meeting, with headline inflation now expected to average 2.6% in 2026, 2.0% in 2027, and 2.1% in 2028 in the bank's baseline scenario.
- Market Impact: The upward revision to inflation forecasts limits aggressive rate cut bets, offering some floor to the euro, but EUR/USD remains under pressure from dollar strength and geopolitical uncertainty.
- Next Meeting: To be confirmed per ECB calendar.
Economic Data That Moved Markets
| Release | Result | Expectation | Currency Impact |
|---|---|---|---|
| US Inflation Forecast (Oxford Economics/Global Forecasters) | 4.2% for 2026 | ~2.7% (Fed estimate) | USD bullish — raised rate-hold bets, boosted dollar demand |
| DXY Session Move (March 27) | +0.31% to 100.21 | Flat/modest gain | Broad USD strength; EUR, GBP, AUD weakened |
| EUR/USD consolidation around 1.1408 support | Holding above 1.1408 | Break lower expected | Downside bias intact; bearish pressure on EUR |
Geopolitical & Risk Factors
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US-Iran Conflict: The escalating US-Iran conflict was identified as a primary driver of the dollar's best weekly performance against major currencies for the week of March 23–27. Safe-haven flows into USD were significant, while the conflict also caused energy prices to skyrocket — a theme flagged in KBC's Economic Perspectives for March 2026.
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US Inflation Overshoot Risk: A global forecasting group projected US inflation at 4.2% for 2026 — sharply above the Fed's own estimate of 2.7% and up from a prior forecast of 2.8%. This materially reduces the likelihood of near-term Fed rate cuts, supporting USD across the board.
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EUR/USD Selloff Pressure: Forex.com's Q2 outlook noted that the EUR/USD selloff is accelerating toward a make-or-break level, with Fed rate-expectation shifts and geopolitical uncertainty both weighing on the pair's near-term trajectory.
Week Ahead: What to Watch
- Early April: USD/JPY at 160 resistance — watch for potential BOJ verbal intervention or official statements if yen continues to weaken; USD/JPY and GBP/JPY are the most exposed pairs.
- Ongoing: EUR/USD 1.1408 support level — a confirmed break lower would open a run toward deeper targets and confirm bearish Q2 momentum; EUR traders should treat this as a critical line in the sand.
- All Week: US-Iran conflict developments — any escalation or de-escalation will ripple immediately into energy prices, safe-haven flows, and USD/commodity-currency pairs (AUD, CAD, NOK). Monitor geopolitical headlines closely.
Reader Action Items
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EUR traders: Watch 1.1408 on EUR/USD as the critical near-term support; a confirmed break lower with follow-through would signal an accelerating selloff and potential move toward 1.12 territory. The cluster resistance at 1.1665 caps any recovery attempts.
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JPY traders: USD/JPY nearing 160 is a historically significant level that has previously prompted BOJ intervention. Consider tight risk management on yen short positions and watch for any official commentary from Tokyo.
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Key risk to monitor: The US-Iran conflict remains the dominant macro wildcard for all pairs. An unexpected escalation — particularly affecting energy supply routes — could trigger sharp moves in safe-haven currencies (USD, JPY, CHF) while punishing risk-sensitive and commodity-linked currencies.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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