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20.03.202611:05 Forex Analysis & Reviews: EUR/USD. March 20th. The ECB Is Ready for an Energy Crisis

Relevancia 04:00 2026-03-21 UTC--4

During Thursday, the EUR/USD pair nearly completed a rebound from the 127.2% correction level at 1.1440, reversed in favor of the euro, and rose toward the Fibonacci level of 100.0% at 1.1577. A rebound from this level would allow traders to expect a reversal in favor of the U.S. dollar and a decline toward 1.1440. A consolidation above 1.1577 would increase the likelihood of further growth toward the 76.4% correction level at 1.1696.

Exchange Rates 20.03.2026 analysis

The wave situation on the hourly chart remains clear. The last completed downward wave did not break the previous low, while the new upward wave broke the previous peak. Thus, the trend may once again shift to bullish. Donald Trump's actions in the Middle East have triggered large-scale military operations involving dozens of countries, which have supported—and continue to support—the U.S. dollar as a "safe-haven" currency. Overall, the outlook for bears remains stronger than for bulls.

On Thursday, the ECB summarized the results of its second meeting of the year. Like the Bank of England and the Federal Reserve, the European regulator expressed concern about the Middle East conflict and forecast strong inflation growth. However, the ECB expects inflation to accelerate only in 2026 and return to normal in 2027–2028. In the long term, the trajectory of the indicator remains unchanged, according to Christine Lagarde. The shock from the war in the Middle East may be prolonged but is expected to last no more than a year. The central bank left interest rates unchanged but stated it is "ready to take action" if necessary. What actions those might be is clear—rate hikes if inflation rises too sharply and too strongly. Christine Lagarde also reported a downgrade in the 2026 economic growth forecast to 0.9% year-over-year due to the energy crisis. As for the crisis itself, the ECB is prepared for any scenario, according to its final statement. Thus, the ECB has opened the door to possible monetary tightening in 2026, while not explicitly signaling that it will be required. Everything will depend on inflation, but traders interpreted Lagarde's remarks as a "hawkish hint." Thanks to these statements, bulls delivered an impressive rally for the first time in a while.

Exchange Rates 20.03.2026 analysis

On the 4-hour chart, the pair reversed in favor of the euro, consolidated above the Fibonacci level of 100.0% at 1.1474, and rose toward the 76.4% correction level at 1.1617. A rebound from this level would favor the U.S. dollar and a resumption of the decline. The descending trend corridor continues to indicate full dominance of bears. A bullish trend will become possible after the euro closes above the corridor. No emerging divergences are observed on any indicator.

Commitments of Traders (COT) Report:

Exchange Rates 20.03.2026 analysis

During the last reporting week, professional traders closed 28,900 long positions and opened 2,454 short positions. The sentiment of the "Non-commercial" group remains bullish due to Donald Trump and his policies, but in recent weeks we have seen an active reduction in long positions. The total number of long positions held by speculators now stands at 266,000, while short positions total 160,000. The bulls still maintain a significant advantage, but it is rapidly shrinking.

Overall, in the long term, major players continue to view the euro with considerable confidence. However, global events—of which there has been no shortage in recent years—continue to influence investor behavior. At present, the market's attention is focused on the Middle East, where the war continues to escalate and expand geographically. In the near term, the euro and dollar exchange rate will depend less on Federal Reserve policy or economic data, and more on the war in Iran. For now, the U.S. dollar is benefiting the most from this situation.

News Calendar for the U.S. and the Eurozone:

Germany – Producer Price Index (07:00 UTC).

On March 20, the economic calendar contains only one minor entry. The news background will not influence market sentiment on Friday.

EUR/USD Forecast and Trading Advice:

Selling the pair is possible today upon a rebound from 1.1577 with a target of 1.1440. Buy positions could have opened on a rebound from 1.1440 with a target of 1.1577, which has already been reached. New buying opportunities may arise upon a close above 1.1577 with a target of 1.1696.

Fibonacci levels are drawn from 1.1577 to 1.2082 on the hourly chart and from 1.1474 to 1.2082 on the 4-hour chart.

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

Samir Klishi,
Analytical expert of InstaSpot
© 2007-2026
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