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Germany’s Ifo Business Climate index deteriorated in March, falling from 88.4 to 86.4, as the escalation in the Middle East weighed heavily on corporate sentiment. The decline was driven by a notable drop in expectations, which fell from 90.2 to 86.0, while the current situation index remained unchanged at 86.7.

The weakness was broad-based across sectors. Manufacturing sentiment worsened from -11.5 to -14.3, while services saw a sharp shift from slightly positive territory at 0.1 to -5.1. Trade and construction also deteriorated further to -24.6 and -15.8 respectively, underscoring the widespread impact of rising uncertainty and weaker demand conditions.

Ifo President Clemens Fuest noted that sentiment has “dropped by a considerable degree,” adding that the war in Iran has effectively put any recovery hopes “on ice.” The data suggest that Germany’s fragile recovery has stalled, with geopolitical risks now compounding existing structural weaknesses in Europe’s largest economy.

Full German Ifo release here.

• UK annual inflation held steady at 3% in February 2026, matching the previous month’s figure.
• The Bank of England (BoE) faces a policy dilemma as public inflation expectations soar amid war fears and manufacturing cost increases.
• The GBP/USD pair remained largely flat, trading in a "squeeze" between key moving averages, which suggests an imminent technical breakout is likely.

Data from the ONS showed the UK's annual inflation rate held firm at 3% in February 2026, matching the previous month's figure and meeting market expectations. This consistency marks a continued period of relative stability, with inflation remaining at its lowest point since March 2025. While the headline figure remained unchanged, the underlying data revealed shifting price pressures across various sectors.

Source: TradingEconomics

Primary Drivers of Price Growth

The most significant upward pressure came from the clothing and footwear sector, which saw prices climb by 0.9%. This represents the first increase in four months, largely driven by the seasonal arrival of new spring collections following the conclusion of January sales. Additionally, costs for housing and utilities experienced a slight acceleration, rising to 4.6% from 4.5% in January.

Sectors Seeing a Slowdown

Conversely, several categories helped keep the headline rate in check:

• Transport: Prices slowed to 2.4% (down from 2.7%), primarily due to a drop in motor fuel costs. Petrol prices fell by 1.6 pence per litre this month, a sharp contrast to the 2.0 pence per litre increase seen during the same period last year.
• Essential Goods and Leisure: Food inflation eased to 3.3%, while recreation and culture slowed slightly to 2.5%.
• Hospitality and Services: Costs for restaurants and hotels cooled to 4%, and the closely watched services inflation rate ticked down to 4.3%.

Overall, the data suggests a balancing act where rising retail and housing costs are being offset by cheaper fuel and a gradual cooling in service and food prices.

Inflation expectations soar on Iran war fears

The Bank of England (BoE) faces an increasingly complex policy environment as new data released on Tuesday revealed a surge in public inflation expectations. This shift in sentiment compounds an already difficult situation for policymakers, as manufacturers have reported their sharpest cost increases since 1992, pressures that are expected to be passed on to consumers in the near future.

Household energy tariffs are currently capped, a scheduled price adjustment in July looms as a significant upcoming catalyst for further inflation. These mounting pressures have created a notable divide between market participants and economic forecasters regarding the BoE's next move.

As of Tuesday per LSEG data, investors were pricing in nearly three quarter-point interest rate hikes before the end of the year to combat rising prices. This should keep GBP partially supported in the interim.

However, any significant escalation to tensions in the Middle East could see the US Dollar surge once more and this could drag on cable.

The initial market reaction

Markets seemed to shrug off today's data with GBP/USD remaining largely flat after the release.

Looking at the bigger picture technical outlook, GBP/USD is caught between long-term bearish momentum and a recent short-term recovery.

The pair is currently trading in a "squeeze" between two critical Simple Moving Averages (SMAs). While the price has recovered from its mid-March lows, it remains capped by the 200-period SMA (dark blue) at 1.34567, which is currently acting as dynamic resistance.

Conversely, the 100-period SMA (light blue) at 1.33560 has shifted from resistance to support, providing a floor for the recent price consolidation. The narrow range between these two averages suggests an imminent breakout is likely as the price searches for a definitive direction.

The path of least resistance appears slightly tilted to the downside unless the bulls can clear and close above the 1.34500 – 1.35000 resistance cluster. A rejection at the 200 SMA could lead to a retest of the 1.3333 support.

However, if the price holds above the 100 SMA, we may see further consolidation before a breakout attempt.

GBP/USD H4 Chart, March 25, 2026

Source: TradingView.com

USD/JPY continues its upward trajectory on Wednesday, rising to 158.78 following a volatile start to the week. Pressure on the yen has eased amid a pullback in oil prices and expectations of a potential resolution to the Middle East conflict-a development of particular significance for Japan's energy-importing economy.

The move comes amid reports of US diplomatic efforts aimed at resolving the conflict with Iran. However, scepticism persists in the market, as Tehran had previously denied the existence of any negotiations with Washington.

Additional support for the yen stems from expectations of possible government intervention. Japanese officials have signalled their readiness to take necessary measures to stabilise the currency.

It has also been reported that Japan's Ministry of Finance is in contact with market participants regarding potential intervention in the oil futures market, given its impact on the yen.

Technical Analysis

On the H4 chart, USD/JPY is forming a consolidation range around the 158.60 level. A decline to 157.40 is expected today, followed by an increase to 158.50. Should the market break upwards from this range, a correction towards 160.10 would be relevant to consider. Subsequently, a new downward impulse to 157.40 is anticipated, with the potential for the correction to extend to 156.00.

Technically, this scenario is confirmed by the MACD indicator-its signal line is below zero and pointing strictly downwards, reflecting the potential for continued correction.

On the H1 chart, the market is shaping a downward wave pattern towards 157.40. Reaching this target level will be considered today. Following the completion of this wave, the development of the next growth wave to 160.10 (test from below) is expected.

The scenario is confirmed by the Stochastic oscillator-its signal line is below the 50 level and pointing strictly downwards towards 20, indicating that short-term downside potential remains.

Conclusion

USD/JPY remains in a growth-oriented mood as easing oil prices and tentative hopes for diplomatic progress in the Middle East offer some relief to the yen. While reports of US-led negotiations with Iran have contributed to a pullback in energy markets, market scepticism persists given Tehran's earlier denial of talks. Japanese authorities stand ready to intervene should volatility spike, adding an element of caution for traders. Technical indicators point to a short-term correction lower before the broader upward trend potentially resumes towards 160.10. The yen's trajectory remains closely tied to developments in both energy markets and geopolitical tensions, which continue to shape the Bank of Japan's policy landscape.

AUD/USD is attempting a recovery wave from 0.6910. NZD/USD is also correcting losses and might recover if there is a clear move above 0.5885.

Important Takeaways for AUD/USD and NZD/USD Analysis Today

• The Aussie Dollar found support near 0.6910 and is now recovering against the US Dollar.
•  There is a key bearish trend line forming with resistance at 0.7015 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD is attempting a recovery wave above 0.5800.
• There is a major bearish trend line forming with resistance near 0.5840 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis

On the hourly chart of AUD/USD at FXOpen, the pair dipped from well above 0.7050. The Aussie Dollar declined below 0.7000, but the bulls were active near 0.6910 against the US Dollar.

The recent swing low was formed near 0.6938, and the pair is now correcting losses. There was a move above the 50% Fib retracement level of the downward wave from the 0.7062 swing high to the 0.6938 low.

However, the bears are active near 0.7015 and the 61.8% Fib retracement. There is also a key bearish trend line near the same region. The pair is now trading below 0.7000 and the 50-hour simple moving average. On the upside, immediate resistance is 7000.

The first major hurdle for the bulls could be 0.7015. A clear upside break above 0.7015 could send the pair toward 0.7060. The next area of interest on the AUD/USD chart is near 0.7095, above which the price could rise toward 0.7120. Any more gains might send the pair toward 0.7150.

On the downside, initial support is near 0.6940. The key breakdown zone could be 0.6910 and 0.6900. Any more losses might send the pair toward 0.6840.

NZD/USD Technical Analysis

On the hourly chart of NZD/USD on FXOpen, the pair also followed a similar pattern and declined from the 0.5885 zone. The New Zealand Dollar gained bearish momentum and traded below 0.5850 against the US Dollar.

The pair even dropped below the 50-hour simple moving average and tested 0.5800. A low was formed near 0.5793, and the pair is now attempting a fresh increase. There was a move above the 50% Fib retracement level of the downward wave from the 0.5887 swing high to the 0.5793 low.

However, there was no close above the 50-hour simple moving average and the 61.8% Fib retracement. There is also a major bearish trend line forming with resistance near 0.5840.

On the upside, the pair is facing hurdles near the same trend line. The next key breakout zone sits near 0.5850. If there is a move above 0.5850, the pair could rise toward 0.5885. Any more gains might open the doors for a move to 0.5940.

On the downside, immediate support on the NZD/USD chart is near 0.5800. The next key area for the bulls might be 0.5785. If there is a downside break below 0.5785, the pair could extend the decline toward 0.5760. The main target for the bears below 0.5760 might be 0.5720.

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Key takeaways

• Volatility driven by conflicting war narratives: The S&P 500 and Nasdaq 100 swung between risk-on and risk-off as mixed signals on US–Iran negotiations triggered sharp reversals, while prediction markets still show low near-term ceasefire odds.
• Cross-asset signals point to fragile sentiment: The US Dollar Index remains supported, AUD/USD failed at resistance, and WTI crude oil holds key support—indicating no clear shift to sustained risk-on positioning.
• Technical resistance caps upside, downside risks persist: Equities are struggling at key moving averages (e.g., S&P 500 at 200-day MA), with downside triggers still in play—suggesting markets remain vulnerable to further declines despite intermittent rebounds.

The global markets have once again seen a “wild swing of the pendulum” in the past eight hours, driven by conflicting news narratives related to the ongoing US-Iran war, which has lasted 25 days as of Tuesday, March 24, 2026.

Tuesday’s session marked a mild reversal from Monday’s sudden burst of risk-on behaviour triggered by US President Trump’s claim that the US and Iran are back on the negotiation table, and a deal is imminent to end the conflict. Iranian officials refuted such claims, which led to a sell-off in global equities, a rebound in the US dollar, and a decline in benchmark oil prices, accompanied by an intraday softening of gold and silver.

By the end of Tuesday’s US session, three major benchmark US stock indices ended with losses; S&P 500 (-0.37%), Nasdaq 100 (-0.77%), and Dow Jones Industrial Average (-0.18%), with a slight risk-off backdrop backed by an increased odds that the US White House is sending military ground forces to Iran to odd US-Israel joint offensive as media reports stated that US administration has ordered the 82nd Airborne Division to deploy around 2,000 soldiers to the Middle East.

At around 4.15 am Singapore time, Wednesday, 25 March (right after the close of Tuesday’s US session), US President Trump gave a press conference that signalled that Iran had offered a “present” as a show of good faith in negotiations he has claimed are ongoing, hinting at a possible ceasefire to happen “very soon”.

The S&P 500 and Nasdaq 100 e-min futures rose sharply at the start of Wednesday, 25 March Asian session, with an intraday gain of 1% before it dwindled to 0.7% at this time of writing.

However, Polymarket’s prediction market platform is not reflecting an imminent US-Iran ceasefire, and several key cross assets’ price action behaviour is not displaying clear signals of an all-out risk-on herd sentiment at this juncture.

Unfolding them as follows…

Low odds of a ceasefire by 31 March

Fig. 1: Polymarket’s US-Iran ceasefire timing odds as of 25 Mar 2026 (Source: MacroMicro)

Data sourced from Polymarket compiled by fundamental data provider, MacroMicro, has indicated that the prediction market-implied probability for a US-Iran ceasefire by 31 March 2026 has only increased slightly to 17.5% on Wednesday, 25 March at this time of writing from its prior day of 12.5% (see Fig. 1).

A higher probability of a ceasefire at 62.5% is being priced in at a longer period, by 31 May 2026 (a jump from 56.5% printed on Tuesday, 24 March).

S&P 500 bulls get rejected again at the 200-day moving average

Fig. 2: US SPX 500 CFD minor trend as of 25 Mar 2026 (Source: TradingView)

The current price actions of the US SPX 500 CFD index (a proxy of the S&P 500 E-mini futures) have its intraday rally cut short again at its 200-day moving average, now coinciding with the 6,648 key short-term pivotal resistance (see Fig. 2).

A breakdown with an hourly close below 6,540 near-term support (downside trigger) may open up scope for the bears to retest Monday’s 23 March 2026 swing low area at 6,470/442 in the first step.

The US Dollar Index remains supported by its 20-day moving average

Fig. 3: US Dollar Index medium-term trend as of 25 Mar 2026 (Source: TradingView)

The recent 1.6% decline seen in the US Dollar Index from its 100.10/100.54 medium-term range support has managed and continued to find support at the 99.00 level, which confluences with the 20-day moving average and the ascending trendline in place since the 27 January 2026 low of 95.55 (see Fig. 3).

AUD/USD bulls capped below the 50-day moving average

Fig. 4: AUD/USD minor trend as of 25 Mar 2026 (Source: TradingView)

The Australian dollar is considered a proxy of risk appetite, where a rally in the AUD/USD represents a risk-on behaviour.

On Wednesday, 25 March, the Asian opening session intraday rally seen in the AUD/USD has been wiped out after a bearish reaction right at the 50-day moving average, with an intraday loss of 0.4% at this time of writing.

Watch the 0.7027 key short-term pivotal resistance on the AUD/USD, and it has staged a bearish breakdown from a minor “Head & Shoulders” bearish reversal configuration on Monday, 23 March 2026 (see Fig. 4).

A break below 0.6910 key medium-term pivotal support exposes further potential weakness towards the next intermediate support at 0.6838 in the first step.

WTI crude oil is still holding above the 20-day moving average

Fig. 5: West Texas Oil CFD index minor trend as of 25 Mar 2026 (Source: TradingView)

Wednesday’s Asian opening session sell-off seen in the West Texas Oil CFD index (a proxy of the WTI crude oil futures) has managed to find support once again at the 20-day moving average, which also stalled Monday’s intraday plunge of 10% triggered by US President Trump’s claim of a new round of negotiations between the US and Iran.

Watch the $88.36/85.50 key short-term pivotal support, and a clearance with an hourly close above $93.70 may see a further push up to retest the minor range resistance of $102.25 (see Fig. 5).

Conclusion

An analysis of the current price structures of the related cross asset classes, S&P 500, US Dollar Index, AUD/USD, and West Texas crude oil, suggests that we are not out of the woods yet for a significant bullish reversal in risk appetite to take form.

Perhaps the market is rebuking US President Trump’s claims of an imminent ceasefire between the US, Israel, and Iran.

Markets

“The fog of uncertainty cannot be an excuse for inaction.” The quote is from Bank of England’s chief economist Huw Pill but could have come from any monetary policymaker serious about preserving credibility central banks had to restore following the 2020-2022 inflation spike. Pill is worried about the current energy shock’s effect beyond the immediate, short-term impact. He fears for the second-round effects through price and wage setting which could materialize much faster than in the past. Having February inflation this morning coming beyond expectations between 3% and 4.3% depending on the gauge will only strengthen his view. Pill’s comments underscore the central bank’s officially stated “readiness to act”. They came after yesterday’s UK March PMIs, which similar to the European ones, already screamed stagflation after being just two weeks into the Middle East conflict. It served as a stark reminder to core bond markets. Bunds underperformed with yields soaring up to 10 bps at the front. Swap yields even rallied 14 bps with the 2-yr reading for 3%. Yields rose between 1 and 3.8 bps in the US and 2.3-5.1 bps in the UK. The US dollar eked out some small gains against most peers, pushing DXY higher to 99.43. EUR/USD stabilized around the 1.16 big figure. EUR/GBP did the same near 0.865. Stocks were torn between conflicting messages coming from president Trump who hailed productive talks with Iran but Iran denying those having happened at all. It’s “the fog of uncertainty” in full swing, including today. The US reportedly ramped up diplomatic efforts by drafting a 15-point plan intended to bring the war to a close. The details are unclear but it is highly unlikely that an emboldened Iran will simply accept the US-set terms. The plan would also call for a one-month ceasefire to allow for negotiations. Markets are currently cheering diplomacy with (Asian) stocks and (European, US) futures markets rising, oil dropping and core bonds stabilizing from the rout yesterday. Looking at the actual developments rather than things being said, we remain cautious. The US is deploying thousands of more troops to the Middle East and Israeli and Iranian missiles continue to pierce the skies. Meanwhile the new deadline to open the Strait of Hormuz is approaching this Friday. 2026 weekends have been critical for any major Trump administration moves.

News & Views

Inflation in Australia eased slightly in February. Headline CPI was flat from January and softened to 3.7% Y/Y from 3.8% Y/Y. Trimmed mean core inflation rose 0.2% M/M to hold unchanged at 3.3% Y/Y. The largest contributors to annual inflation were housing (+7.2%), food and non-alcoholic beverages (+3.1%) and recreation and culture (+4.1%). Transport prices fell 0.2%, with automotive fuel prices declining 7.2% Y/Y (due to monthly declines of 3.4% and 3.2% in February and January respectively). However, this mitigating effect will be sharply reversed in the coming months due to higher prices related to the conflict in the Middle East. Inflation is expected to rise further away from the 2-3 % RBA inflation target. Even as the 2-y yield eased 10 bps (4.63%), the market still sees of chance of 70% of a next follow-up RBA rate increase at the early May meeting. The Aussie dollar over the previous days lost some momentum and this morning eases below the AUD/USD 0.70 barrier (currently 0.697).

The National Bank of Hungary (MNB) yesterday left its policy rate unchanged at 6.25%. The bank raised the inflation forecast for 2026 (3.8% from 3.2%) and 2027 (3.7% from 3.3%) with inflation still expected to return to 3% in 2028. The outlook for growth was downwardly revised from this year (1.7% from 2.4%) and for 2027 (3% from 3.1%) but upwardly revised from 2028 (2.9%). MNB sees household consumption as the main driver for growth in due to rising real wages and the government’s income-increasing measures. Capacity-increasing investment projects of recent years still are expected to help the expansion of industrial exports. In February 2026, inflation and core inflation declined to 1.4% and 2.1%, respectively due to favourable repricings. Prices caps have a mitigating impact on inflation in the coming months, but CPI is expected to return above the tolerance band (3% +/- 1%pt) band in Q3. In the current economic environment, maintaining the stability of domestic financial markets, especially that of the foreign exchange market, is seen as crucial for anchoring inflation expectations and thus achieving price stability. Maintaining tight monetary conditions is warranted. With the 2-y swap yield at 7.44%, the market currently prices the risk that MNB at some point might be forced to tightening policy to secure financial stability. EUR/HUF in volatile trading over recent days hovered near the 390 mark. Governor Varga said MNB has the right to intervene in FX if necessary.

Daily Pivots: (S1) 1.1567; (P) 1.1597; (R1) 1.1638; More….

No change in EUR/USD's outlook as consolidation continues 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) 158.23; (P) 158.71; (R1) 159.19; More...

USD/JPY is staying in sideway trading and intraday bias remains neutral. 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) 1.3300; (P) 1.3389; (R1) 1.3522; More...

Range trading continues in GBP/USD and intraday bias stays neutral. 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) 0.7853; (P) 0.7889; (R1) 0.7919; More….

Sideway trading continues in USD/CHF and intraday bias remains neutral. 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.