is trading at 1.1645 on Tuesday, March 10, 2026, extending gains for a third consecutive session after bouncing sharply from Monday’s near four-month low of 1.1507. That 138-pip recovery from Monday’s floor to Tuesday’s current level is not a trivial technical bounce — it is a meaningful repricing of the dollar’s safe-haven premium as Trump’s ceasefire signals collide with contradictory military headlines. The pair is navigating one of the most complex macro environments in years, and every number in the current setup deserves examination rather than generalization.
The is sitting near 95.38-98.75 depending on the reference point — different data sources show different snapshots as the dollar oscillates in real time with every geopolitical headline. What is consistent across all readings is that the greenback is losing ground against the Australian dollar most aggressively, with AUD gaining 0.92% against the USD in Tuesday’s session — the largest move in the major currency cross matrix. The EUR gained 0.08% against the dollar, GBP gained 0.21%, while the JPY is the only major that weakened against the dollar, falling 0.05%. The AUD’s outperformance and JPY’s underperformance tell the same story from opposite directions: when risk appetite improves and commodity prices stabilize after a crash, commodity-linked currencies surge and traditional safe havens like the yen get sold.
Monday’s drop to 1.1507 was driven by pure safe-haven dollar demand as oil spiked toward $119, Iran’s IRGC declared it would dictate the war’s end on its own terms, and markets priced the worst-case inflationary scenario into the dollar. That is the mechanical logic of the extreme: when energy prices threaten a 1970s-style supply shock, capital floods into dollars because dollar liquidity is the deepest pool in the world during genuine crises. The EUR/USD fell from above 1.164 to 1.1507 in that panic window — a 133-pip collapse that reflected not European weakness but dollar hoarding.
Tuesday’s reversal to 1.1645 is the unwinding of that panic premium. Trump’s comments to CBS that the operation is “very complete, pretty much” and his announcement that the US Navy will escort tankers through the Strait of Hormuz changed the immediate calculus. Oil crashed more than 10%, the dollar’s crisis bid evaporated, and EUR/USD recovered the ground lost in the panic. The pair has now extended gains for three straight sessions after that Monday low. Three consecutive sessions of gains after a geopolitical shock bottom is a technically meaningful pattern — it suggests the move down was exhaustion, not a trend change.
The critical resistance that stopped the bulls on their prior attempts sits at 1.164. Tuesday’s trading near 1.1645-1.1652 is testing that exact level. Whether it breaks and holds above 1.1679-1.1680 — where the 0.5 Fibonacci retracement, the descending channel resistance, and the 50-day EMA all converge simultaneously — determines the next 200-300 pip directional move.
The DXY slipped below the 0.50 Fibonacci level at 98.62 after failing to hold the gains it had built up to 99.68. On the 4-hour chart, the index is consolidating near 98.59, sitting right on top of the 50-day EMA at 98.55. The RSI has declined toward 45, signaling that bullish momentum is fading without yet flipping to outright bearish. The structure — trading inside a rising channel but with softening candles closing beneath short-term support — is the textbook precursor to a channel breakdown.
Immediate support sits at 98.37 (the 0.618 Fibonacci level). If that breaks, the next meaningful support is 97.55, which represents a potential 100-plus point decline in the DXY from current levels. Resistance is at 99.18 and 99.68. The 200-day EMA at 98.10 is the deeper backstop. The structure says the dollar’s bounce off its war-shock extreme is losing steam. A break below 98.37 accelerates EUR/USD toward 1.1714 and potentially 1.1765, where the 200-day EMA on the euro side serves as the upper resistance ceiling.
The critical variable that keeps the DXY bid is the dual threat of Wednesday’s CPI print and the ongoing Iran conflict. If CPI comes in hot — consensus forecast is 2.4% headline and 2.5% core year-over-year — the dollar gets an immediate technical reprieve as rate-hold expectations get reinforced. CME FedWatch currently prices a 95% probability the Fed holds rates at the March 17-18 meeting. A hot print cements that, and could push DXY back toward 99.18-99.68 resistance. A soft print does the opposite — the 57.2% probability of a July rate cut gets reinforced, dollar weakens, and EUR/USD breaks above 1.1680.
February’s US employment report made the Fed’s situation genuinely uncomfortable. Payrolls fell by 92,000 — a significant miss in absolute terms — while the unemployment rate ticked up to 4.4% from 4.3% the prior month. That is a labor market softening at the exact moment oil prices are screaming inflation risk. The Fed’s dual mandate — price stability and maximum employment — is pulling in opposite directions simultaneously, and that tension is the central narrative for dollar direction over the next 60 days.
Bank of America economist Aditya Bhave made the case Tuesday that the market is wrong to assume an oil shock automatically generates a hawkish Fed response. His comparison is exact: in 2022, when Russia invaded Ukraine and energy prices surged, core PCE was above 5%, unemployment was below 4%, and payrolls were running at 500,000 per month. Today’s unemployment is 4.4%, payrolls just printed -92,000, and the fiscal support that backstopped consumer spending in 2022 is largely absent. A supply shock in this environment is as likely to prompt rate cuts — if consumption deteriorates — as rate hikes. The 2-year Treasury yield, which tracks near-term Fed rate expectations, has been moving in lockstep with oil prices since the Iran conflict began. If oil normalizes toward $75-$80, the hawkish rate interpretation unwinds simultaneously, and the dollar loses one of its primary support pillars.
ECB policymakers are navigating the same dilemma from the European side. Martin Kocher said the ECB “mustn’t act too swiftly.” Madis Müller acknowledged the probability of a rate hike has increased but warned against rushing. Gediminas Šimkus flagged that a deeper crisis could hit both inflation and growth simultaneously — the stagflation trap. The ECB’s cautious tone means neither the Fed nor the ECB is giving the market clear directional guidance on rates, which is why EUR/USD is stuck in a tight range rather than trending aggressively in either direction. Both central banks are data-dependent in a world where the most important data — oil-driven inflation — is moving faster than any model can capture.
Strip everything back to first principles and EUR/USD is currently a Strait of Hormuz derivative. Every credible signal of conflict resolution sends the dollar lower and EUR higher. Every credible signal of escalation does the opposite. The IRGC’s declaration Tuesday that “it is we who will determine the end of the war” is the hawkish counterweight to Trump’s optimistic timeline. Iran warning ships against transiting the Strait adds immediate supply risk premium back into oil and back into the dollar. The EUR/USD pair swung from 1.1507 to 1.1645 and back to hovering near 1.1630 within 24 hours — that is 138 pips of pure geopolitical beta.
LiteFinance’s Dmitri Demidenko framed the structural problem precisely: EUR/USD’s direction currently hinges almost entirely on oil prices, which is why the pair recorded its best single-day rally since January on a 20% collapse, then immediately gave back half the gain as conflict signals returned. Capital Economics puts Brent at potentially $150 per barrel if the Strait of Hormuz remains fully closed, stabilizing near $130 in a sustained disruption scenario. At $130-$150 oil, the dollar surges, EUR/USD tests and breaks below 1.1507, and potentially reaches the 1.1419 target that technical analysis identifies as the next major support on a confirmed breakdown.
The flip side: if the G7 successfully coordinates a strategic petroleum reserve release through the IEA — which the IEA’s extraordinary Tuesday meeting was explicitly convening to assess — oil prices drop further, the dollar’s inflation-driven safe-haven bid dissolves, and EUR/USD has a clean path to 1.1714-1.1765. Those two scenarios bracket the current 250-350 pip range that the pair is likely to trade until the Strait situation clarifies.
On the 4-hour chart, EUR/USD rebounded sharply from 1.1530 and pushed back through the 1.1600 (0.236 Fibonacci) level — the first structural confirmation that the panic selling was exhausted. The recent bullish candles have larger bodies and higher lows, which is the technical signature of buyers gaining conviction. The pair is now approaching the convergence zone at 1.1679 (0.5 Fibonacci), channel resistance, and the 50-day EMA — all stacked on top of each other between 1.1679 and 1.1680. This is a decision point. A clean break above 1.1680 with volume opens the door to 1.1714, and beyond that the 200-day EMA at 1.1765 becomes the next ceiling. The RSI has climbed to approximately 60, which signals improving momentum without yet entering overbought territory. Momentum is building but has not yet run ahead of price.
The bearish technical case: the pair remains inside a descending channel, and the MACD signal line on the H4 chart is below zero and pointing downward — sustained bearish momentum in the medium term despite the short-term recovery. RoboForex’s technical model targets 1.1668 as the near-term upside, followed by a new downward wave toward 1.1419 as the local objective. That scenario — rally to 1.1668, then sell — is the mean-reversion trade within the broader descending structure.
The support levels to watch on any reversal are 1.1605 and 1.1590. LiteFinance’s Demidenko explicitly flagged these as the trigger points for a sell-off: if EUR fails to hold above 1.1605, a sustained breakdown toward 1.1419 becomes the primary scenario. Below 1.1507 — Monday’s low — the next meaningful support drops to 1.1419, and below that the February lows provide the last line of defense before a retest of the 1.13 handle.
is trading around 1.3461-1.3480, up 0.21% against the dollar on the day, extending gains for a third consecutive session after rebounding from the 1.3285 low. The pair pushed through descending channel resistance with bullish candles showing sizeable bodies and higher lows. The 50-day EMA at 1.3413 has been reclaimed — price is now trading above it, which flips the short-term bias from bearish to neutral-to-bullish. The 200-day EMA at 1.3550 is the next ceiling, with immediate resistance at 1.3489 followed by 1.3574.
GBP’s recovery against the dollar is not a sterling-specific story — the UK has the same energy cost headaches from the Iran conflict that every oil-importing economy faces. The pound is rising because the dollar is falling, not because UK fundamentals are improving. The RSI at approximately 60 confirms momentum is picking up without reaching overbought territory. As long as 1.3410 holds as support, the recovery thesis is intact. A break below that level brings 1.3346 into focus as the next support.
The GBP/USD read reinforces the EUR/USD directional call: the dollar is in a corrective weakening phase after its war-shock extreme, and both European currencies are recovering in parallel. The magnitude of that recovery depends on the Iran conflict trajectory, Wednesday’s CPI, and the Fed’s communication on March 17-18.
The Australian dollar gained 0.92% against the USD on Tuesday — the largest move in the entire major currency matrix. AUD gained 0.84% against EUR, 0.72% against GBP, and 0.98% against JPY. This is not a minor fluctuation. The AUD is a commodity-linked, risk-sensitive currency that surges when global risk appetite improves, commodity prices stabilize after a crash, and the dollar weakens simultaneously. All three conditions are present on Tuesday. AUD outperforming every other major currency by a wide margin is the forex market’s clearest vote of confidence that the immediate worst-case geopolitical scenario has passed.
The pair is approaching the 0.7100 level with momentum, and Arslan Ali’s technical analysis suggests bulls have a legitimate shot at a breakout if the RBA-Fed policy divergence continues to counteract the “war premium” that was embedded in the dollar. The RBA’s rate path is comparatively less inflation-constrained than the Fed’s right now, which gives AUD fundamental tailwinds beyond the pure risk-on trade.
The word that multiple ECB officials and market observers are starting to use — stagflation — is the nuclear option for EUR/USD. If the Iran conflict extends, oil stabilizes above $100, inflation reaccelerates, and simultaneously the labor market deteriorates (as the February -92,000 payroll print suggested is already happening), both the Fed and ECB face the worst possible policy dilemma: raise rates to fight inflation and crush growth, or cut rates to protect employment and let inflation run. In that environment, neither currency has a clean advantage, and EUR/USD would likely trade in a volatile, directionless range.
The Brent crude trajectory determines whether stagflation becomes a live concern or a theoretical warning. At $83-$84 today, the immediate inflationary pressure has moderated significantly from the $119 peak. But the Strait of Hormuz remains functionally closed, Saudi Aramco has cut production, and the UAE, Kuwait, and Iraq have all reduced output in parallel. Goldman Sachs data shows trace oil crossings resuming through the Strait — that trickle could grow into a flow if Trump’s Navy escort plan materializes, or it could be snuffed out if Iran escalates its blockade enforcement.
EUR/USD at current levels is pricing in a partial resolution — oil down from $119 to $83, war still ongoing but seemingly moving toward conclusion. It is not pricing in a full ceasefire, nor is it pricing in $150 oil. That middle-scenario pricing at 1.1645 seems roughly correct given the genuine uncertainty. The pair needs a definitive catalyst — either a confirmed ceasefire or a confirmed Hormuz blockade intensification — to break out of the current 1.1507-1.1765 range with conviction.
February CPI lands Wednesday with consensus at 2.4% headline and 2.5% core year-over-year. Both numbers predate the Iran oil shock, which means this report will not capture the current inflationary impulse from energy prices. But the market will react to it anyway, and the reaction will be disproportionate because participants are using it as a proxy for the Fed’s forward posture.
A hot print — headline above 2.4% or core above 2.5% — reinvigorates the “higher for longer” narrative, pushes DXY back toward 99.18-99.68, and sends EUR/USD back toward the 1.1600-1.1605 support zone. That is a sell-on-strength setup: wait for the initial dollar spike, then buy EUR/USD near 1.1605 with a tight stop below 1.1590. The fundamental argument is that a backward-looking hot CPI reading does not change the trajectory of oil prices or the Hormuz situation, and the dollar’s inflation-driven bid will fade once the initial reaction settles.
A soft print — headline at or below 2.3% or core at or below 2.4% — accelerates the July rate cut narrative, weakens the DXY below 98.37, and pushes EUR/USD through the 1.1680 resistance zone toward 1.1714. That is the more aggressive bullish catalyst and creates a cleaner setup for a sustained move toward 1.1765.
Friday’s January PCE is the Fed’s preferred metric. Same dynamic applies — backward-looking, pre-conflict data, but market-moving regardless. A soft PCE on Friday combined with a soft CPI on Wednesday would constitute a genuinely dovish macro setup that justifies EUR/USD testing the 200-day EMA at 1.1765 before the end of the week.
Current price: 1.1645. The three-day recovery from 1.1507 is real and technically supported. The descending channel structure is intact as the overarching medium-term framework. The convergence zone at 1.1679-1.1680 is the bull-bear line in the sand for the next 48 hours.
Bullish case above 1.1680: Target 1.1714, then 1.1765 (200-day EMA). Catalyst required: soft CPI Wednesday, dovish Fed March 17-18, or confirmed Iran ceasefire.
Bearish case below 1.1605: Target 1.1507 retest, then 1.1419 on a confirmed break. Catalyst: hot CPI Wednesday, Iran escalation and oil spiking back toward $100-$110, or hawkish Fed communication.
Rating on EUR/USD: Cautious Buy with tight risk management. The structural case for dollar weakness — deteriorating labor market, potential Fed cuts in July, oil normalizing from extreme levels, and the long-term trend of central banks diversifying away from dollar reserves — remains intact. The tactical risk is Wednesday’s CPI print and the Iran conflict’s next headline. Size positions accordingly — this is not a market for full-conviction directional bets until the Strait of Hormuz situation resolves. The range is defined. Trade the boundaries, not the middle.
That’s TradingNEWS.com
