Date: March 13, 2026
Market Sentiment: Risk-Off / Hawkish USD
The market sentiment is dominated by escalating geopolitical tensions in West Asia and the permanent closure of the Strait of Hormuz by Iran.
This has triggered a “flight to safety” into the US Dollar and a sharp sell-off in risk of assets and emerging market currencies.
Stagflationary fears are rising as crude oil prices surge, potentially forcing central banks to maintain higher interest rates for longer to combat energy-driven inflation.
Previous Session Recap
On Thursday, March 12, the US Dollar Index (DXY) climbed above the 99.60 level. US equities retreated to their lowest levels since November 2025, with the S&P 500 and Nasdaq 100 dropping nearly 1%. The Indian Rupee (INR) hit a record closing low of 92.25 against the USD. Gold prices saw a tactical pullback as the dollar’s strength and rising Treasury yields (10-year at 4.24%) outweighed its safe-haven appeal.
Top Overnight Global Forex Headlines
Strait of Hormuz Crisis
Iran’s leadership declared the Strait of Hormuz “permanently closed” until the resolution of the West Asia conflict, threatening 20% of global oil and gas supplies.
Rupee at All-Time Low
The USD/INR pair hit a fresh intra-day record low of 92.44 on Friday morning amid heavy FII outflows.
BoE Hawkish Shift
Markets now price a 63% probability of a Bank of England rate rise by year-end as energy prices threaten to derail the UK’s disinflation path.
Fed Watch
Expectations for a Fed rate cut have dwindled, with the CME FedWatch Tool showing a 46% chance of rates holding steady through 2026, up from 5% just a month ago.
Focus of the Day
The primary focus is the US Core PCE Price Index (January data), the Federal Reserve’s preferred inflation gauge.
Given the energy spike, any “stickiness” in this data will solidify the “higher-for-longer” narrative, likely pushing the DXY toward the psychological 100.00 barrier.
Key Economic Events (Times in GMT/CET)
| Event | Time (CET) | Forecast | Actual / Status |
| UK: GDP (MoM Jan) | 08:00 | 0.2% | 0.0% (Missed) |
| UK: Industrial Production (MoM Jan) | 08:00 | 0.0% | -0.2% (Missed) |
| UK: Manufacturing Production (Jan) | 08:00 | 0.0% | 0.1% (Beat) |
| USA: Core PCE Price Index (MoM/YoY) | 13:30 | 0.3% / 3.0% | Upcoming |
| USA: Personal Income & Outlays | 13:30 | 0.3% | Upcoming |
| USA: Michigan Consumer Sentiment (Prelim) | 15:00 | 55.0 | Upcoming |
Major Forex Currency Outlooks
EUR/USD (Bearish)
Trading near 1.0500. Technicals suggest a break below 1.0480 could open the door to 1.0400. Resistance is held at 1.0620.
GBP/USD (Neutral/Bearish)
Supported by better-than-expected UK GDP data but capped by USD strength. Key support at 1.2350; resistance at 1.2500.
USD/JPY (Bullish)
Probing resistance near 159.20. While the 160.00 level remains a “line in the sand” for the BoJ, the yield differential continues to favor the Greenback.
AUD/USD (Bearish)
Under pressure due to China’s growth concerns and risk-off flows. Support at 0.6450.
Commodities Watch
- Crude Oil (Brent): Trading near $100.46/bbl. Goldman Sachs has raised its March forecast to average over $100/bbl. The immediate target is $105.00 if supply disruptions persist.
- Gold (XAU/USD): Currently hovering around $5,099/oz. It is caught in a tug-of-war between geopolitical demand and a surging USD. Major support at $5,000; resistance at $5,200.
Key Forex Technical Zones
| Instrument | Pivot Point | Support | Resistance |
| EUR/USD | 1.1555 | 1.1485 | 1.1628 |
| GBP/USD | 1.3364 | 1.3300 | 1.3475 |
| USD/JPY | 158.40 | 157.40 | 159.45 |
| AUD/USD | 0.7030 | 0.6915 | 0.7145 |
| USD/CAD | 1.3650 | 1.3580 | 1.3715 |
| USD/CHF | 0.7962 | 0.7925 | 0.7980 |
| NZD/USD | 0.5980 | 0.5910 | 0.6050 |
| Gold (XAU) | $5,090 | $5,000 | $5,200 |
| Silver (XAG) | $88.50 | $84.00 | $90.50 |
| Brent Oil | $91.20 | $88.00 | $93.35 |
Trader’s Takeaway
Volatility is expected to peak during the US PCE release. In the current environment, “Cash is King” (USD), and the trend follows energy prices.
Watch for potential intervention warnings from the BoJ (JPY) or RBI (INR) as local currencies hit extreme lows.
Low-leverage positions are advised given the unpredictable nature of the Middle East headlines.
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