EUR/USD Price Forecast: Holds Firm Near 1.1450 but Bears Remain in Control Below Key EMA
March 16, 2026 – FXStreet — The EUR/USD currency pair maintained a steady position close to the 1.1450 level during Monday’s Asian trading session. However, despite this relative calm, bearish technical signals persist, particularly as the pair remains below the crucial 100-day exponential moving average (EMA). These factors suggest that downward momentum could continue prevailing in the near term.
Market Context and Geopolitical Influences
The Euro’s limited upside potential comes amid escalating geopolitical tensions in the Middle East, which tend to bolster safe-haven currencies like the US Dollar (USD). Over the weekend, former US President Donald Trump called for "many countries" to deploy warships to the strategically vital Strait of Hormuz. He also warned of a bleak future for NATO if US allies do not contribute toward securing this critical shipping route.
Such conflict-driven uncertainty typically benefits the USD, applying additional pressure on the Euro.
Upcoming Central Bank Decisions Under Scrutiny
Market participants’ focus has also shifted to key monetary policy decisions scheduled for later this week, notably the US Federal Reserve (Fed) and the European Central Bank (ECB).
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The Fed is widely expected to hold interest rates steady at 3.50%–3.75% during its Wednesday meeting. Nevertheless, lingering inflation concerns, fueled by energy price volatility, have tempered investor hopes for forthcoming rate cuts.
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Meanwhile, swap market pricing reflects a growing probability that the ECB will accelerate its tightening cycle, with some investors anticipating the first rate hike as early as June, per data from LSEG.
These divergent central bank outlooks further complicate the EUR/USD outlook.
Technical Analysis: Downside Remains Favored
From a technical standpoint, the EUR/USD’s near-term bias remains bearish:
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The pair continues to trade below its 100-day EMA, which after previously peaking, has started to flatten—a sign of potential downward pressure.
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Recent prices have broken beneath the lower Bollinger Band and are currently sliding along the downside envelope.
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The Relative Strength Index (RSI) has entered oversold territory following a decline from mid-range levels, confirming strong selling momentum.
Key levels to monitor include:
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Resistance: Initial resistance is seen at 1.1510, the most recent recovery high. Beyond this, a stronger supply zone appears near 1.1620, where the 20-day Bollinger middle band aligns with the 100-day EMA, forming a significant cap.
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Support: Immediate support rests at 1.1415, the recent closing low. A breach below here could open the way towards the next bearish target near 1.1360, in line with the trajectory of the lower Bollinger Band.
As long as the pair remains capped beneath 1.1620, rallies are likely to attract selling interest, keeping downside risks elevated.
Understanding the Euro and Factors Driving Its Value
The Euro is the official currency of the 20 European Union countries comprising the Eurozone and ranks as the second most traded currency globally after the USD. In 2022, it accounted for approximately 31% of all foreign exchange transactions, with an average daily trading volume exceeding $2.2 trillion. The EUR/USD pair itself is the most heavily traded currency pairing worldwide, representing about 30% of forex transactions.
The Role of the ECB
The European Central Bank (ECB), based in Frankfurt, Germany, oversees the Eurozone’s monetary policy. It aims primarily to ensure price stability by managing inflation through setting interest rates, among other tools. Typically:
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Higher interest rates or expectations of rate hikes tend to strengthen the Euro by attracting foreign investment.
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Conversely, rate cuts or dovish policies may weigh on the currency’s value.
The ECB Governing Council meets eight times annually to decide on monetary policy, with members including national central bank heads and the ECB President Christine Lagarde.
Impact of Inflation and Economic Data
Eurozone inflation, measured by the Harmonized Index of Consumer Prices (HICP), deeply influences ECB policy. Inflation above the 2% target usually compels the ECB to consider raising rates. Furthermore, broader economic indicators such as GDP growth, manufacturing and service sector activity, employment data, and consumer sentiment also affect the Euro’s performance. Strong economic data generally supports the currency, while weak data can drag it lower.
Trade Balance Effects
The Euro is also sensitive to the Eurozone’s trade balance, which measures the difference between exports and imports. A positive trade balance (trade surplus) indicates strong export demand and tends to support the Euro, while a deficit might exert downward pressure.
Looking Ahead
Traders in the EUR/USD pair will continue to watch geopolitical developments, especially in the Middle East, alongside fresh economic data and the upcoming policy decisions by the Fed and ECB. Given the pair’s current technical posture—with bearish momentum prevailing below key moving averages—downside risks remain predominant, though any easing of geopolitical tensions or unexpected shifts in central bank policy expectations could change the near-term outlook.
Author: Lallalit Srijandorn, FXStreet
Lallalit Srijandorn is a digital entrepreneur and market analyst based between Paris and Bangkok. She specializes in forex markets and macroeconomic trends.
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