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17.03.202609:00 Forex Analysis & Reviews: Central Bank Week

Relevancia 02:00 2026-03-18 UTC--4

In addition to the war in the Middle East, from the middle of the week, all market participants' attention will focus on central bank meetings, starting with the US and ending with Japan.

Exchange Rates 17.03.2026 analysis

Central banks around the world, faced with a new inflation threat triggered by the war in Iran and the possibility of having to postpone interest rate cuts, will surely be forced to reassess their plans and forecasts.

Currently, no changes are anticipated: the Federal Reserve, the European Central Bank, and the Bank of England are expected to keep borrowing rates at their current levels as they evaluate how the sharp rise in energy prices will affect consumer prices and economic growth.

However, it is clear that central banks find themselves in a delicate position. On the one hand, they aim to curb inflation arising not only from rising energy prices but also from supply chain disruptions; on the other hand, they fear that talk of rate increases could stifle economic growth. The current situation requires a cautious and measured approach, as any hasty decision could have long-term negative consequences.

Analysts predict that the decision on rates will depend on the further development of the situation regarding oil and gas prices and how quickly consumers and businesses can adapt to new conditions. The dynamics of inflation expectations will also play an important role.

For traders, the tone of policymakers will be key, as it determines future movements in currency markets; failing to acknowledge the presence of yet another inflationary shock would be simply reckless. Much depends on how long the conflict will last—something the markets cannot currently assess. Investors fearful of stagflation are experiencing sharp fluctuations in oil prices and uncertainty regarding Trump's next steps, raising questions about how quickly central banks will react to new price pressures.

Although markets are no longer fully pricing in rate cuts in 2026, they still lean toward easing policy, making the US an exception among the G7 countries. Indeed, as dissatisfaction with rising gasoline prices grows ahead of the mid-term elections, Trump has resumed his calls for rate cuts, even demanding a temporary solution. Economists at Morgan Stanley believe a quarter-point rate cut could occur in September, rather than in June as previously expected. "Even if oil prices remain high for an extended period, given the political pressure for loose monetary policy, especially before the November elections, rate cuts are still more likely than hikes," the bank noted.

Regarding the current technical picture of EUR/USD, buyers need to focus on reclaiming the 1.1490 level. Only this will allow them to target a test of 1.1525. From there, they could climb to 1.1565, but achieving this without support from major players will be quite challenging. The farthest target will be the high of 1.1605. If the trading instrument declines to around 1.1465, I expect some significant actions from major buyers. If no one is present there, it would be better to wait for the low to be updated at 1.1440 or open long positions from 1.1410.

As for the current technical picture of GBP/USD, the pound buyers need to reclaim the nearest resistance at 1.3290. Only this will allow them to target 1.3335, above which it will be quite challenging to break through. The farthest target will be the area of 1.3365. If the pair falls, bears will attempt to take control of 1.3265. If they succeed, breaking the range will deal a serious blow to the bulls' positions and push GBP/USD down to the minimum of 1.3240, with a prospect of reaching 1.3220.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Jakub Novak,
Analytical expert of InstaSpot
© 2007-2026
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