The second week of March 2026 was defined by a volatile tug-of-war between safe-haven flows and hawkish repricing. In this forex weekly market recap i provide an in-depth technical and fundamental breakdown of the major currency pairs, commodities, and risk assets following a week defined by geopolitical escalation and critical inflation data.
As the conflict in Iran intensifies and energy prices remain volatile, we analyze the “inflection points” and key price levels that will dictate price action into the March 16 weekly open.
US Dollar (DXY) technical analysis: CPI reality check and resistance tests
The US Dollar Index enters the weekly close firmly positioned against a major resistance barrier at 99.36/38. This region, defined by the 78.6% retracement of the November decline and the January high-day close (HDC), has remained an impenetrable ceiling for the past eight sessions. While Wednesday’s CPI report initially suggested a cooling trend at 2.4%, the market quickly pivoted to the “shadow inflation” looming in the energy sector.
As noted by The Motley Fool on Thursday, February’s data was collected before the current geopolitical crisis:
The oil shock that sent global benchmark Brent crude to $120 per barrel on Monday hasn’t yet shown up in consumer prices… if oil stays elevated, future inflation readings aren’t likely to be so tame.”
This realization has stalled the “early-week pullback” and kept the DXY bid as traders anticipate a hawkish shift in the Fed’s stance to combat this secondary inflation wave.
DXY key technical trade levels to watch:
- Support: 98.55 – 98.69 This is the critical area where the price is expected to find buyers. It aligns with a major long-term moving average at 98.34.
- Invalidation: 98.24 As long as the price stays above this level by the end of the week, the overall trend is still pointing upward. If it falls below this, the bullish plan is cancelled.
- Resistance: 99.38 The Dollar needs to close a full day above this specific price to prove the uptrend has officially restarted.
- Next target: 100.16 – 100.34 If the price breaks through the ceiling, this is the next major zone we expect it to hit.
DXY outlook: The market is now pricing in a “higher for longer” reality. Fed Fund Futures have solidified expectations that no rate cuts will be delivered until at least July. A weekly settlement above 99.38 would signal a major shift in momentum for the rest of March.
USD/JPY technical forecast: Yen gains strength on safe-haven demand
The USD/JPY rally is losing steam as it hits a major resistance zone near 158.44/88. While the Dollar is fundamentally strong, the Japanese Yen has reclaimed its throne as the preferred safe-haven asset this week. Investors are moving capital into the Yen to hedge against war-related risks, overshadowing the usual interest rate differentials.
USD/JPY key technical trade levels to watch:
- Support: 157.70 This is the immediate floor. A drop below this level suggests the short-term rally is over.
- Invalidation: 156.37 This is the “make or break” point for bulls. Staying above this keeps the long-term uptrend alive; falling below it signals a deep correction.
- Resistance: 158.88 Sellers are currently defending this level. A break above it is needed to clear the path toward the yearly highs.
- Next target: 159.46 – 160.21 If buyers reclaim control, these are the psychological levels to watch.
USD/JPY outlook: The immediate bias is leaning toward a pullback. Unless the pair can clear 158.88 decisively, expect further Yen strength as geopolitical headlines continue to dominate the start of next week.
Gold (XAU/USD) technical analysis: record highs meet yield resistance
Gold prices remain in a precarious position despite the ongoing turmoil in Iran. XAU/USD is hovering just above support at 5032. While the war headlines provided a massive “geopolitical floor” on Monday, the jump in US Treasury yields following the CPI report has made it difficult for Gold to sustain its rally.
Gold key technical trade levels to watch:
- Support: 5032 This is the immediate safety net. If this fails, the next major stop is the 4894 zone.
- Invalidation: 4792 If Gold falls below this level, the multi-month bullish trend is officially broken.
- Resistance: 5257 – 5279 This is the current ceiling. Gold needs to clear this March opening range to regain momentum.
- Next target: 5343 – 5378 A daily close above this zone is required to ignite a fresh run toward all-time record highs.
Gold outlook: The outlook remains constructive due to war risks, but the metal is vulnerable to a deeper pullback if the US Dollar continues to strengthen. Watch the 5032 level closely at the Monday open for direction.
GBP/USD technical update: cable under pressure at critical pivot
GBP/USD is trading with high caution, ending the week struggling near the 1.3650 handle. The pair is being squeezed between a hawkish Bank of England trying to get ahead of energy inflation and a US Dollar that refuses to give up ground.
GBP/USD key technical trade levels to watch:
- Support: 1.3480 This is the primary defense line for buyers.
- Invalidation: 1.3320 A break below this level shifts the medium-term trend from neutral to bearish.
- Resistance: 1.3710 This is the current “sell zone.” Buyers need to push past this to shift the momentum back in their favor.
- Next target: 1.3848 If the pair can clear the 1.3710 hurdle, this is the next major objective for the bulls.
GBP/USD outlook: The “Cable” is currently in a holding pattern. Until we see a break of the 1.3650 pivot, expect range-bound volatility with a slight downside bias as the energy shock continues to weigh on the UK outlook.
Forex weekly market recap EUR/USD, USD/CHF & market sentiment
The Euro and Swiss Franc have reflected the broader market’s flight to the Dollar, though with differing levels of resilience.
- EUR/USD: The pair continues testing year-to-date lows, currently trading at 1.14740. The energy crisis in Europe, exacerbated by the Middle Eastern conflict, is weighing heavily on the Eurozone’s growth outlook. Technical resistance is stacked at 1.1550.
- USD/CHF: Currently trading at 0.78710, the Swissie has failed to capture the same safe-haven flows as the Yen. The focus is on a break of the 0.7810 support or a push back toward 0.7950 resistance.
- Market sentiment: With oil spiking and equities falling for a second week, risk appetite remains low. Investors are hunkering down ahead of the January PCE data, which many fear will confirm that the inflation “monster” is far from tamed.
Conclusion: PCE Data and the Path Forward
As we transition into the new week, the market focus shifts heavily to the upcoming January Personal Consumption Expenditures (PCE) data. With energy prices fueling fresh inflation fears, these prints will serve as the ultimate arbiter of the Federal Reserve’s next move.
The bottom line for the week is clear: the US Dollar breakout is currently testing critical resistance, and the market’s focus remains on a possible inflection at the 99.38 level. Traders should stay nimble, watch the weekly closes for guidance, and prioritize capital protection as volatility remains at multi-year highs.