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The US Dollar has been in the spotlight over the past two months, after remaining the pet peeve for FX since early 2025.

With wartime, however, things can change fast and decisively: the Global Reserve has risen by 4.40% since its end-January lows in a blink.

The new Fed Chair elect, Hawkish repricings, Petrodollars, and a general backing away from risky trades built up sudden demand, particularly at a time when Asset Managers were the most bearish on the USD in 14 years – and when the Market is stuck on one side of a trade, it often results in huge reversals.

The Petrodollar trade, however, was the fuel for the currency Market throughout this month, and despite what seemed like a relative dissonance this week, as the tone sours again, the correlation is coming right back.

The Petrodollar trade – Oil and US Dollar Correlation. Source: TradingView

Indeed, after cautious optimism throughout this week's trading following the announcement of the US-Iran talks, it seems that Iran is still heavily inclined to maintain its strategic advantage over the Strait of Hormuz and its ballistic missile capabilities, two of the most contentious points in the indirect talks.

But the real issue for Markets is that President Trump's tone has gradually grown more pessimistic, and this coincides with the fact that the huge Marine fleet is arriving in the Arabian Sea in less than a day – so where are these mere distraction tactics?

Good question as War strategy is something that us common mortals cannot fully grasp – the Art of War, legendary treatise, can help in that sort (and is also a great read for traders).

Deception tactics are common, and nobody can really understand what any side has in mind.

What is sure, however, is that WTI is now rebounding toward $95, the higher bound of its momentum pivot, and above the psychological level, sentiment will sour even further.

WTI (US) Oil 1H Chart – March 26, 2026. Source: TradingView

At least, the US Dollar is enjoying this move, amid a more hesitant FX session. As further clarity is expected in the next 24 hours, consider current levels as indications of doubtful neutrality amid the ongoing war.

Anything above in Oil and the Dollar implies a worsening in conditions and sentiment, which should drag into next week (+ Pessimistic)

On the other hand, a return below $90 in WTI will be most welcome to investors (+ Optimistic)

We will look at the Dollar Index, EUR/USD, and AUD/USD to assess the current state of the Market and whether more upside is warranted for the Dollar amid resurfacing doubts.

Dollar Index 4H Chart

Dollar Index 4H Chart, March 26, 2026 – Source: TradingView

The US Dollar attempted a corrective sequence as the US-Iran talks were announced, but with WTI not correcting much further, the currency still receives fundamental support.

A few technical elements are developing in the Dollar Index which can help to find trades in major FX pairs:

• A short term, relatively flat bear-channel has developed and contained the Index movement. Traders may either use it as points of entry to long and short the US Dollar or as breakout signal – We are currently reaching its highs (99.90).
  • Its lows are at around 98.65.
• A more Neutral 99.00 to 100.00 Range is holding for now – It is less responsive but more stable to watch the higher timeframe movement.

Levels of interest for the Dollar Index:

Resistance Levels

• Morning Spike 99.93 and Channel Top
• Weekly range highs 100.00
• 100.00 to 100.50 Main Resistance Zone
• War Highs 100.544

Support Levels

• Intraday micro support 99.30
• 98.70 to 99.00 Support (Mini Range lows)
• 98.00 2025 Support
• Support 97.40 to 97.60
• 2025 Lows 96.40 to 96.80 Support

AUD/USD 4H Chart and Technical Levels

AUD/USD 4H Chart, March 26, 2026 – Source: TradingView

AUD/USD just broke its past month's 0.6970 to 0.7150 Major range to the downside, indicating high potential for a further correction.

Fundamentals are changing for the Aussie dollar after a strong period after two consecutive hikes from the RBA, particularly after Australian CPI surprised to the downside.

Failing to rebound above 0.6980 would hint at more bearish activity in the major pair.

Levels of interest for AUD/USD:

Resistance Levels

• Dec 2021 Lows 0.6970 to 0.70 Major Pivot (broken range holds above)
• Mini Resistance 4H MA 50 – 0.7020; Bullish above
• 2023 Highs from 0.71 to 0.7150 Resistance
• 0.71867 March highs
• June 2022 Extremes 0.72 to 0.7230

Support Levels

• 0.69 to 0.6935 Early Feb Support
• 0.69015 session lows
• Micro-support 0.6850 (+/- 30 pips)
• October 2024 Mini-support 0.6750 (+/- 100 pips)

EUR/USD 4H Chart and Technical Levels

EUR/USD 4H Chart, March 26, 2026 – Source: TradingView

EUR/USD is now turning bearish, breaking its 4H 50-period MA after a double top this week and crossing below its Pivot Zone (1.1540 to 1.1570).

This hints at a test around at least the 1.1475 to 1.15 November Support, which could extend further to the 1.1410 War lows if the situation deteriorates.

Levels to place on your EUR/USD charts:

Resistance Levels

• Immediate resistance 1.1546
• Resistance 1.16250 to 1.16350
• 1.1650 to 1.17 March Resistance
• 1.1750 mini-resistance and Channel Top
• Resistance Zone around 1.18 (+/- 150 pips)

Support Levels

• 1.1475 to 1.15 November Support
• War lows 1.1410
• 1.1350 to 1.14 Support
• 1.12 to 1.13 Next Main Support Zone

Safe Trades and keep a close eye on Middle East developments!

Daily Pivots: (S1) 1.1532; (P) 1.1582; (R1) 1.1608; More….

EUR/USD dips mildly today but stays in range above 1.1408. Intraday bias remains neutral. With 1.1666 cluster resistance (38.2% retracement of 1.2081 to 1.1408 at 1.1665) intact, further decline is in favor. On the downside, below 1.1408 will resume the fall from 1.2081 to 38.2% retracement of 1.0176 to 1.2081 at 1.1353. However, decisive break of 1.1666 will argue that the fall from 1.2081 has completed, and turn bias back to the upside for 61.8% retracement of 1.2081 to 1.1408 at 1.1824.

In the bigger picture, prior break of 55 W EMA (now at 1.1501) should confirm rejection by 1.2 key cluster resistance level. The whole up trend from 0.9534 (2022 low) might have completed as a three wave corrective rise too. Deeper fall is expected to long term channel support (now at 1.0528). Meanwhile, risk will stay on the downside as long as 1.2081 holds, even in case of strong rebound.

Daily Pivots: (S1) 158.80; (P) 159.15; (R1) 159.82; More...

USD/JPY rebounds higher today but stays below 159.88 short term top. Intraday bias remains neutral at this point. In case of another dip, downside should be contained by 38.2% retracement of 152.25 to 159.88 at 156.96 to bring rebound. On the upside, break of 159.88 will target a test on 161.94 high.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 152.70) holds. Firm break of 161.94 will pave the way to 61.8% projection of 102.58 to 161.94 from 139.87 at 176.75.

Daily Pivots: (S1) 1.3336; (P) 1.3386; (R1) 1.3415; More...

GBP/USD dips mildly today but stays in established range. Intraday bias stays neutral at this point. With 1.3482 resistance intact, further decline is in favor. On the downside, below 1.3216 will resume the fall from 1.3867 to 1.3008 structural support. However, decisive break of 1.3482 will argue that the fall from 1.3867 has completed, and turn bias back to the upside for 61.8% retracement of 1.3867 to 1.3216 at 1.3618.

In the bigger picture, considering bearish divergence condition in both D and W MACD, a medium term top should be in place at 1.3867. Firm break of 1.3008 support will argue that fall from 1.3867 is at least correcting the rise from 1.0351 (2022 low) with risk of bearish reversal. That would open up further decline to 38.2% retracement of 1.0351 to 1.3867 at 1.2524. For now, medium term outlook will be neutral at best as long as 1.3867 resistance holds, or until further development.

Daily Pivots: (S1) 0.7882; (P) 0.7904; (R1) 0.7939; More….

USD/CHF recovered today but stays below 0.7957. Intraday bias stays neutral at this point. As noted before, rise from 0.7603 should be correcting whole decline from 0.9200. Above 0.7957 will target 38.2% retracement of 0.9200 to 0.7603 at 0.8213. This will remain the favored case as long as 0.7746 support holds.

In the bigger picture, a medium term bottom should be in place at 0.7603 on bullish convergence condition in D MACD. Rebound from there is seen as correcting the fall from 0.9200 only. However, decisive break of 55 W EMA (now at 0.8085) will suggest that it's probably correcting the larger scale down trend from 1.0146 (2022 high). On the other hand, rejection by the 55 W EMA will setup down trend resumption to 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382 at a later stage.

Daily Pivots: (S1) 1.3766; (P) 1.3794; (R1) 1.3838; More...

Intraday bias in USD/CAD remains on the upside for the moment. Rebound from 1.3480 is seen as correcting the whole down trend from 1.4791 and should target 1.3927 resistance, or probably further to 38.2% retracement of 1.4791 to 1.3480 at 3981. On the downside, below 1.3771 minor support will turn intraday bias neutral first.

In the bigger picture, price actions from 1.4791 are seen as a corrective pattern to the whole up trend from 1.2005 (2021 low). Deeper fall could be seen, as the pattern extends, to 61.8% retracement of 1.2005 to 1.4791 at 1.3069. However, break of 1.3927 resistance will argue that the correction has completed with three waves down to 1.3480 already.

Daily Pivots: (S1) 0.6925; (P) 0.6965; (R1) 0.6987; More...

AUD/USD's fall from 0.7181 extends lower today and the development should now confirm rejection by 0.7206 key fibonacci resistance. The decline is see as correcting whole up trend from 0.5913. Intraday bias is now on the downside for 38.2% retracement of 0.5913 to 0.7187 at 0.6700. On the upside, though, above 0.7012 minor resistance will turn intraday bias neutral again first.

In the bigger picture, current development argues that rise from 0.5913 (2024 low) is reversing whole down trend from 0.8006 (2021 high). Decisive break of 61.8% retracement of 0.8006 to 0.5913 at 0.7206 will pave the way back to 0.8006. This will remain the favored case as long as 0.6706 resistance turned support holds, even in case of deep pullback.

Risk aversion has returned to global markets following a high-stakes ultimatum from US President Donald Trump, signaling a breakdown in the 15-point Iran negotiation. As Brent crude rebounds above $105, the focus has shifted to the Saturday, March 28 expiration of the five-day strike pause. Trump’s shift from "productive talks" to warnings of "military obliteration" suggests the diplomatic off-ramp has hit a brick wall, sparking a broad rally in Dollar. The $120 Brent level as the critical "canary in the coal mine"; a move toward this target in the next 48 hours would signal that markets have fully discounted a weekend military escalation.

The latest social media activity from the White House reveals a significant amount of strategic anxiety. While a confident leader typically allows diplomatic results to speak for themselves, the public labeling of Iranian negotiators as "strange" and "begging" suggests an attempt to narrate a reality that is not yet visible on the ground.

If Iran were truly in a position of desperation, the U.S. would likely not need to issue an all-caps ultimatum on social media. Instead, the rhetoric implies that the 15-point proposal—which includes maximalist demands such as the dismantling of Iran’s nuclear program—has hit a functional brick wall.

The most alarming development for the markets is the phrase "NO TURNING BACK." This shift in tone coincides perfectly with the looming expiration of the five-day strike pause set for this Saturday. Earlier in the week, the administration was promoting "productive talks," but the transition to "it won't be pretty" indicates that the window for a peaceful off-ramp is rapidly closing. This serves as a direct warning to Tehran that the U.S. is prepared to transition from limited, surgical strikes to targeting critical energy infrastructure or initiating ground operations.

A truly "calming" diplomatic post would have focused on the progress of the 15 points or the mutual benefits of a regional peace. Instead, this latest communication focused on total military obliteration, reminding Iran they have "zero chance of a comeback."

Markets are now actively front-running a weekend escalation. The $120 level in Brent crude is the single most important metric to watch; if oil marches toward that target tomorrow, it is a clear signal that the market has completely discounted the "negotiation" narrative and is bracing for a significant military event on Saturday night or Sunday.

In the currency markets, Dollar is the strongest performer on the day so far, supported by both safe-haven demand and the repricing of interest rate expectations. Yen and Swiss Franc are both also benefiting mildly from renewed risk aversion. In contrast, commodity currencies are underperforming, with Aussie and Kiwi leading losses, while Sterling is also pressured. Loonie has managed to hold relatively better, supported by the rebound in oil prices, while Euro also positions in the middle.

In Europe, at the time of writing, FTSE is down -1.41%. DAX is down -1.69%. CAC is down -1.11%. UK 10-year yield is up 0.125 at 4.901. Germany 10-year yield is up 0.085 at 3.047. Earlier in Asia, Nikkei fell -0.27%. Hong Kong HSI fell -1.89%. China Shanghai SSE fell -1.09%. Singapore Strait Times fell -0.34%. Japan 10-year JGB yield rose 0.02 to 2.274.

BoE’s Breeden: 'Lackluster' Growth is the UK’s Disinflationary Shield

Bank of England Deputy Governor Sarah Breeden is betting on the UK’s weak economy to absorb the latest global energy shock. She argues that "rising slack" in the labor market and weak pricing power make a wage-price spiral "less likely," allowing the BoE to stay sidelined. Read more.

ECB's 'Option April': Nagel Warns Against Shying Away from Pre-emptive Hikes

Bundesbank President Joachim Nagel signaled that an April rate hike is now a live option following the conflict-induced energy spike in Iran. Warning that the Governing Council should not "shy away" from pre-emptive action, Nagel shifted the market’s focus toward the risk of a "secondary" inflation surge in wages and services. Read more.

RBA Warns of 'Restrictive' Shift: Why Rising Neutral Rates and Petrol Shocks Could Trigger More Hikes

Assistant Governor Christopher Kent just delivered a sobering update on the RBA’s path forward. While global uncertainty usually cools rates, the "Supply Shock" from the Middle East is having the opposite effect—pushing Neutral Rates higher and keeping the pressure on Australian households. Read more.

AUD/USD Mid-Day Report

Daily Pivots: (S1) 0.6925; (P) 0.6965; (R1) 0.6987; More...

AUD/USD's fall from 0.7181 extends lower today and the development should now confirm rejection by 0.7206 key fibonacci resistance. The decline is see as correcting whole up trend from 0.5913. Intraday bias is now on the downside for 38.2% retracement of 0.5913 to 0.7187 at 0.6700. On the upside, though, above 0.7012 minor resistance will turn intraday bias neutral again first.

In the bigger picture, current development argues that rise from 0.5913 (2024 low) is reversing whole down trend from 0.8006 (2021 high). Decisive break of 61.8% retracement of 0.8006 to 0.5913 at 0.7206 will pave the way back to 0.8006. This will remain the favored case as long as 0.6706 resistance turned support holds, even in case of deep pullback.

US initial jobless claims rose 5k to 210k in the week ending March 21, slightly below expectation of 211k. Four-week moving average of initial claims fell -250 to 210.5k.

Continuing claims fell -32k to 1.819m in the week ending March 14, lowest since May 25, 2024. Four-week moving average of continuing claims fell -2k to 1.847m, lowest since October 5, 2024.

Full US jobless claims release here.

Bank of England Deputy Governor Sarah Breeden argued today that "second-round effects" from the Iran energy shock are less likely to take root in the UK. Citing rising slack in the labor market and a lackluster outlook for economic activity, Breeden suggested that diminished pricing power for firms and workers acts as a natural buffer against a wage-price spiral.

Speaking at an event today, Breeden offered a measured assessment of the UK’s inflationary trajectory in the wake of Middle East tensions. Rather than signaling an immediate policy tightening, she pointed to the underlying fragility of the UK economy as a protective factor. Breeden noted that the outlook for activity was "lackluster" even before the recent energy spike, suggesting that the economy is already in a state of weakened demand that prevents higher costs from being easily passed on to consumers.

"All of that means that firms and workers are likely to have less pricing power, less wage bargaining power," Breeden explained. This assessment hinges on the idea that the UK’s cooling labor market will prevent the "wage-price feedback loop" that typically follows a commodity shock.

Additionally, Breeden explicitly stated that it is "not wise to act" before the Monetary Policy Committee has sufficient information, noting that the Bank expects to learn a "chunk more" by the time of the April decision.