Sample Category Title

GBP/CAD is entering a decisive moment as markets prepare for two key economic releases today: UK January GDP and Canada’s February employment report. The data arrives just days before the BoC’s policy decision on March 18 and the BoC’s meeting on March 19, making the numbers particularly influential for near-term policy expectations.

Additionally, these events are unfolding against an unusually volatile global backdrop. The Iran war continues to drag on while oil prices have surged back toward the $100 level, as traders increasingly price the risk of prolonged supply disruptions. For central banks, this environment complicates the policy outlook by raising inflation risks even as growth remains fragile.

For the BoE, market expectations have already shifted dramatically over the past two weeks. Investors previously anticipated a 25bps rate cut from the current 3.75% policy rate. However, the energy shock and renewed inflation fears have pushed consensus toward a hold at next week’s meeting.

That shift places even greater emphasis on today’s UK GDP report. Expectations are already modest, with forecasts centered around a monthly gain of roughly 0.1% to 0.2%. A result in line with those estimates would likely provide relief for BoE policymakers by confirming that the economy is at least maintaining modest growth.

Such an outcome would allow the BoE to keep policy steady while waiting to see how the oil shock affects inflation dynamics. In that scenario, the central bank could delay easing until later in the year once the immediate energy volatility subsides.

However, a negative GDP print would represent a far more troubling outcome. Contraction even before the recent oil surge would strengthen the argument that the UK economy is drifting toward stagflation—an environment where growth weakens while inflation rises due to external energy shocks.

In such a situation, the BoE could find itself effectively paralyzed. Cutting rates to support growth would risk pushing Sterling lower, which would further raise the cost of energy imports and intensify inflation pressures.

On the other hand, the BoC faces a different but equally complex challenge. Markets widely expect the BoC to remain on hold at 2.25% for an extended period, but the oil shock adds a unique twist for Canada as a major energy exporter.

Higher oil prices tend to support Canada’s national income and strengthen the currency, even though they can simultaneously hurt household purchasing power through higher fuel costs. This dual effect makes interpreting economic data particularly important for policymakers.

Expectations for today’s employment report point to job gains of roughly 10,000 to 15,000, with the unemployment rate edging up from 6.5% to 6.6%. Stronger-than-expected employment would reinforce the case for the BoC to maintain its pause while allowing the oil-driven boost to support the economy.

Conversely, a sharp deterioration—particularly if unemployment climbs toward 6.7% or even 6.8%—could force policymakers to reconsider whether an additional “insurance” rate cut might be necessary to support the labor market.

In terms of immediate market reaction, the more volatile and relatively unpredictable Canadian employment report is likely to be the main volatile driver for GBP/CAD. Additionally, the directional bias leans slightly toward further downside in GBP/CAD. If Canadian data holds up, Loonie is well positioned to ride the wave of high oil prices.

Technically, GBP/CAD is approaching a critical inflection point. The pair is now testing the major psychological and structural support zone around 1.80, near the 1.7980 level 1.382% projection of 1.8912 to 1.8322 from 1.8816 at 1.8001.

The importance of this level is amplified by broader technical signals. GBP/CAD has already broken below its 55 W EMA and the lower boundary of a multi-year rising channel, while bearish divergence has appeared on the weekly MACD indicator.

A decisive break below 1.80 would suggest that the decline from 1.8912 is evolving into a deeper correction of the entire uptrend from 1.4069 (2022 low). Such a move would open the door to a slide toward 38.2% retracement of 1.4069 to 1.8912 at 1.7062 in the medium term.

However, if the pair manages to hold above the 1.80 region and stage a strong rebound, the current move could instead be interpreted as a near term sideway consolidation within the broader uptrend that has defined GBP/CAD since 2022.

Key Highlights

• USD/JPY remained in a bullish zone and climbed above 158.00.
• A key bullish trend line is forming with support at 158.20 on the 4-hour chart.
• Bitcoin could form a base for a move above $72,000 and $72,500.
• Crude oil prices are again showing signs of strength for a move to $105.

USD/JPY Technical Analysis

The US Dollar remained supported at 156.50 against the Japanese Yen. USD/JPY started a fresh increase above 157.20 and 158.00.

Looking at the 4-hour chart, the pair settled well above 158.00, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). There is also a key bullish trend line forming with support at 158.20.

On the upside, the pair is now facing sellers near 159.20. The first major resistance sits at 159.50. A close above 159.50 could open the doors for gains above 160.00. In the stated case, the bulls could aim for a move to 162.00. Any more gain might open the doors for a test of 165.00.

If there is no upside continuation, the pair might start a downside correction. Immediate support is seen near 158.25, the 50% Fib retracement level of the upward move from the 157.27 swing low to the 159.23 high, and the trend line.

A close below the trend line support might send USD/JPY to 157.25. The main support sits at 156.80 and the 100 simple moving average (red, 4-hour), below which the pair might gain bearish momentum. In the stated case, it could even revisit 155.00 in the coming days.

Looking at Crude oil, the bulls seem to be active above $85.00, and they could soon aim for a fresh wave above $100 and $105.

Upcoming Key Economic Events:

• US Durable Goods Orders for Jan 2026 – Forecast +1.2% versus -1.4% previous.
• US Personal Income for Jan 2026 (MoM) - Forecast +0.5%, versus +0.3% previous.
• Michigan Consumer Sentiment Index for March 2026 (Prelim) – Forecast 55.0, versus 56.6 previous.

New Zealand’s manufacturing sector continued to expand in February, with BusinessNZ Performance of Manufacturing Index edging slightly lower from 55.1 to 55.0. While the headline reading dipped marginally, the index remains comfortably above the 50 breakeven level, signaling ongoing growth in the sector.

Underlying components showed mixed but generally positive trends. Production rose modestly from 56.5 to 56.7, while new orders strengthened from 56.6 to 57.6, indicating improving demand conditions. Employment, on the other hand, fell notably from 52.6 to 50.4.

Survey responses pointed to improving business sentiment, with the share of positive comments rising to 55.5% in February from 47.7% in January. Manufacturers reported stronger orders, enquiries, and sales, helped by firmer export demand and improving conditions across certain sectors.

BNZ Senior Economist Doug Steel noted that while geopolitical tensions in the Middle East are dominating market attention, February’s PMI reading provides a solid starting point for the manufacturing sector heading into an uncertain global environment.

Full NZ BNZ PMI release here.

Key insights from the week that was.

The Westpac-MI Consumer Sentiment Index lifted modestly in March, up 1.2% to 91.6, still an outright pessimistic reading. The latest survey was in the field over the week to March 7, so it only captured part of this week’s conflict escalation in the Middle East. Responses over the last three days of the sample were closer to an index read of 84 – a deeply pessimistic result which emphasises just how dynamic sentiment is to the situation offshore.

Underscoring the slightly firmer headline result in the month was an improvement in current assessments of family finances (+1.8%), buyer sentiment (4.9%) and the economy in five years’ time (2.4%). This more than offset the flat and weaker readings on the year-ahead view for family finances and the economy respectively. Many of the near-term nerves stem from consumers’ hawkish mortgage rate expectations, with over 75% of respondents anticipating a lift over the next twelve months.

Recent commentary from RBA officials has continued to emphasise the Board’s pessimistic view on supply capacity, concerns over the persistence of domestic inflation and their desire to keep price expectations anchored. Now facing an additional threat from offshore in the form of surging energy prices, the RBA is likely to feel compelled to act without delay. Responding to these developments, Chief Economist Luci Ellis this week announced a revision to our RBA profile, adding an additional 25bp rate hike next week at the March meeting, in addition to the hike already forecast for May. This cumulative 50bps of tightening will take the cash rate back to its post-pandemic peak of 4.35%. The breadth, intensity and persistence of inflation risks stemming from the conflict are highly uncertain and skewed upward near term, but should fade through 2027, allowing a reversal of 2026’s rate hikes from late-2027.

Before moving offshore, it is worth noting that the latest NAB business survey suggests optimism among Australian businesses largely evaporated in February. Not only does this coincide with weaker reads on consumer sentiment, but also a somewhat softer start to the year for trading conditions and profitability. This foreshadows a plateauing of economic growth after an acceleration to near trend over the course of 2025.

In the US, current assessments and expectations of the labour market were re-written last Friday. US nonfarm payrolls surprised to the downside in February, declining 92k in the month. Gains over the prior two months were also revised down 69k, leaving the 3-month average at just 6k versus 50k in January, and the 12-month average around 13k compared to 89k the year prior. The unemployment rate also ticked up to 4.4% despite a 0.1ppt decline in the participation rate. More significantly, annual revisions reduced the participation rate and employment-to-population ratio by 0.4ppts and 0.5ppts respectively. These outcomes point to US labour supply being constrained by both structural and cyclical factors, risking economic growth into the medium term.

That said, to date economic growth has held up, as highlighted by January retail sales – the control group up 0.3%. Housing starts also showed some life in January, up 7.2%, although the level of starts is still 18% below its 2022 peak and permits are weaker still, 28% below. The run up in US term interest rates into the end of the week meanwhile signals growing risks for US inflation and financial conditions. This is particularly troubling for the US, coming at a time when labour market data warrants further easing. Our full updated expectations for the US economy and interest rates can be found in March Market Outlook, out today on Westpac IQ.

Finally to China. The January/February trade data highlighted the continued success of China’s rapid expansion of high-tech manufacturing and related infrastructure, exports up 21.8% year-to-date and the trade surplus near its widest mark at $213.6bn (for the two months combined). Persistent strength in the trade surplus is a core expectation of our China forecasts. But, after near 20% gains for several years, growth in external demand must slow. As discussed in the last edition of Cliff Notes and March Market Outlook, pro-active stimulus is necessary to accelerate domestic demand from H1 2026. The greater the risk for global energy prices and supply, the more pressing the need for action.

• AUD/USD fell over 1% from a multi-year peak as the US Dollar strengthened amid intensifying safe-haven demand.
• The hawkish Reserve Bank of Australia (RBA) may limit the downside, driven by escalating inflation pressures.
• The pair has retreated to a key technical inflection point between the 100-day MA (0.7072) and 200-day MA (0.7051), where the RSI is now signaling a potential shift in momentum in favor of bulls.

AUD/USD fell 1% + on Thursday with the pair reacting to a resurgent US Dollar as safe haven demand intensified due to Middle East tensions. AUD/USD was trading at a multi-year peak and thus a retracement may be welcomed in some quarters.

Hawkish RBA may limit downside

Inflationary pressures are intensifying in Australia, where the Melbourne Institute survey recently reported that March Consumer Inflation Expectations climbed to 5.2%, the highest level since July 2023.

This uptick from February's 5% reading underscores the growing challenge for the Reserve Bank of Australia (RBA), which had already taken a proactive stance in early February by raising the Official Cash Rate (OCR) by 25 basis points to 3.85%.

As the ongoing energy crisis continues to drive costs higher, market speculation is mounting that the RBA and other global central banks will be forced to maintain an aggressive interest rate hiking cycle to contain burgeoning prices.

According to the latest LSEG data, markets are pricing in around a 78% probability of a 25 bps rate hike at the upcoming March 17, 2026 meeting.

Economic data ahead

While the Australian economic calendar remains quiet this Friday, the focus shifts to a heavy slate of data from the United States.

Markets are bracing for a series of high-impact releases, including the January Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation metric alongside January Durable Goods Orders.

Additionally, the preliminary March reading of the Michigan Consumer Sentiment Index will provide a fresh look at how the spike in energy prices and financial market volatility are impacting American consumer confidence.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Markets may remain at the mercy of geopolitical developments which could even overshadow tomorrow's US data. The intriguing part about AUD/USD is the technical picture where the pair is at a key inflection point.

Technical Analysis - AUD/USD

From a technical point of view, AUD/USD has finally pulled back from its multi-year peak around the 0.7187 handle.

The pullback has brought the pair to a key inflection area resting between the 0.07072 (100-day MA) and 0.7051 (200-day MA) handles.

The previous impulse move to the upside occurred after a breakout of the 0.7034 handle which rests just below the inflection area.

AUD/USD Four-Hour Chart, March 13, 2026

Source:TradingView.com

Dropping down to a one-hour chart and there is some evidence that bulls may already be returning.

The price has slowed significantly as it approached the 0.7070 handle.

The bigger hint comes from the period-14 RSI which has just left oversold territory. This is usually seen as a sign that momentum has shifted in favor of the bulls.

An immediate hurdle on the H1 chart rests at 0.7100. Acceptance back above this level is needed before the 0.7130 and recent highs at 0.7187 come into focus.

AUD/USD One-Hour Chart, March 13, 2026

Source:TradingView.com

Despite yesterday's more optimistic US CPI report, Markets are now focusing on a bleaker inflationary picture ahead.

A major theme in Markets is the progressive repricing for a more persistent and damaging US-Iran-Israel war, which would have a long-lasting consequences on Oil prices.

Polymarket Odds for the War to End before April 30

As you can see from the Polymarket odds, the odds for a 5- to 6-week conflict fell from 80% to the current 47%, adding to the (justified) fears of a damaging long-war.

With the Iranian regime holding out stronger than expected, nominating a new leader in Mojtaba Khamenei and continuing its attacks on neighboring countries, it seems that it would either require more force or a new plan to really materialize the conflict into the desired regime change outcome.

Participants and the general media are now roasting the Trump Administration for its lack of Exit plans. To me, this could be a strategy to create doubt, as we are "only" on the 13th day of the conflict, but people's skepticism regarding Trump's temerity is justified.

Even his prior advisors warned of such, warning of a "self-afflicted wound" to the US Economy as Oil rallies back to $95.

For those who haven't looked back yet, the consecutive Oil Crises in the 1970s were the prelude to the infamous Stagflation era, and the Market never jokes around with such economic trends.

Oil and Dow Jones Inverse Correlation. March 12, 2026 – Source: TradingView

If anybody is enjoying this at least, it's the Dollar bulls, as the Petrodollar has been fuming higher since the beginning of the Conflict.

Rate traders have now priced out around 40 bps of rate cut pricing since the beginning of the conflict, with Rate cut odds towards end 2026 only around 23 bps.

Subject to an almost 1 to 1 correlation with Oil since early March, the Greenback has kept outperforming major Forex currencies, in particular the subject of this afternoon's FX outlook, the Yen.

Oil and USD/JPY Positive Correlation. March 12, 2026 – Source: TradingView

We will dive into a two-timeframe outlook for USD/JPY as the pair comes close to the 160.00 barrier.

An intervention could be near!

USD/JPY Daily Chart

USD/JPY Daily Chart – March 12, 2026. Source: TradingView

USD/JPY has been the most affected major pair since the beginning of the conflict, holding an almost perfectly negative correlation to the Oil prices.

Asian countries are the major victims of Strait of Hormuz disruptions, particularly concerning Oil deliveries.

Despite Japan having some of the most ample strategic Oil reserves, Yen was already facing some heavy scrutiny regarding heavy imports and their more elevated costs.

The effect of higher forecasted deficits doesn't help.

So if the Hormuz Crisis lasts longer, it could be a final nail in the coffin for the pair.

Furthermore, the Japanese Yen is highly correlated to US Treasuries, which have been getting ransacked from the higher inflation expectations due to Japan being the nº1 owner of the Debt asset. The combination of both has led to the current 4.60% move higher in the major pair.

160.00 is the level to watch, as the Ministry of Finance could really move the pin on the numerous threats of an FX intervention – Watch reactions as we regain the January highs.

USD/JPY 1H Chart and Technical Levels

USD/JPY 1H Chart – March 12, 2026. Source: TradingView

Despite the staggering run in the pair, some profit taking is unrolling just after the pair wicked above January highs to 159.420.

Reversing around the mid-line of the textbook bull channel, particularly at current trading levels could bring interesting mean-reversion opportunities.

If the pair continues back above 159.50 and makes a 4H close above, the idea would get pushed back until 160.00, with potential intervention coming up at these levels.

Levels to place on your USD/JPY charts:

Support Levels:

• Bull Channel Lows 158.10
• Dec highs Major Pivot 157.40 to 157.65
• 156.00 Pivotal Support
• 153.50 to 154.00 Minor Support
• 146.00 August Range Main Support

Resistance Levels:

• Daily and 2026 highs 159.420
• 159.00 to 159.50 2026 Major resistance
• April 2024 160.00 to 160.40 Major Resistance
• June 2024 Mini resistance 160.70 to 161.00

The Market is turning bleak in this morning's action as Oil rallies to fresh highs yet again.

Our past-day Oil analysis saw rangebound action to potentially turn into a grind higher, which realized quicker than most expected!

The commodity is up close to 10% on the day, slowly but surely extending to the $98-$100 Resistance.

This occurs as attacks on tankers around the Arabian Sea and the Strait of Hormuz are now multiplying.

WTI Oil 1H Chart (11:16) – March 12, 2026. Source: TradingView

Oil is forming a bull-channel in the immediate action – Its top is located around $101.30 so that could be a target to the upside.

Buyers are attempting a break of the channel's mid-line ($96.55) – A key area for momentum.

Momentum buyers will want to see if the 20-Hour MA ($92.68) holds.

The recent rise in Oil has gradually priced out Fed Cuts for 2026 due to inflationary fears. There is now less than one full cut priced in for the year!

The FOMC meeting is approaching fast (next Wednesday, March 18).

Current Fed Rate Cut Pricing to the December 2026 Meeting– FedWatch Tool

This is hurting Stock Markets extensively on the session, Nasdaq is leading to the Downside down -1.50% – update coming up soon!

Stock Index and Energy Commodity Futures – Courtesy of Finviz

Safe Trades, keep track of the advancement of the conflict!

AUDCAD: ⬇️ Sell

• AUDCAD reversed from resistance area
•  Likely to fall to support level 0.9600

AUDCAD currency pair reversed from the resistance area between the key resistance level 0.9735 (which stopped wave i at the end of February) and the upper daily Bollinger Band.

The downward reversal from this resistance area will most likely form the daily Japanese candlesticks reversal pattern Bearish Engulfing.

Given the strength of the resistance level 0.9735 and the bearish divergence on the daily Stochastic, AUDCAD currency pair can be expected to fall to the next support level 0.9600.

EURNZD: ⬆️ Buy

• EURNZD reversed from support area
• Likely to rise to resistance level 1.9800

EURNZD currency pair reversed from the support area between the key support level 1.9535 (which has been reversing the price from August of 2025) and the lower daily Bollinger Band.

The upward reversal from this support area stopped the previous wave C of the intermediate ABC correction (2).

Given the strength of the support level 1.9535 and the bullish divergence on the daily Stochastic indicator, EURNZD currency pair can be expected to rise to the next resistance level 1.9800.