EUR/USD Weekly Analysis: FOMC and ECB Decisions Set to Drive Volatility
Market Overview — Week of March 16, 2026
EUR/USD enters the new week under heavy pressure after breaking below the critical 1.1500 level, reaching its lowest point since July 2025. The pair’s decline reflects broad dollar strength fueled by risk-off sentiment, geopolitical tensions in the Middle East, and elevated oil prices driving safe-haven flows into the greenback.
This week is one of the most event-heavy on the calendar, with both the Federal Reserve (Wednesday) and European Central Bank (Thursday) delivering rate decisions within 24 hours of each other. These back-to-back central bank events will likely determine whether EUR/USD finds a floor or extends its selloff.
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Key Levels to Watch
| Level | Type | Significance |
|---|---|---|
| 1.1500 | Broken Support | Previous floor, now resistance — a reclaim here would be bullish |
| 1.1450 | Immediate Support | Round number + prior consolidation zone |
| 1.1400 | Major Support | Psychological level, July 2025 swing low area |
| 1.1350 | Extended Target | Next support if 1.1400 fails — last seen June 2025 |
| 1.1550 | Near Resistance | Recent breakdown point, sellers likely defending |
| 1.1600 | Key Resistance | 50-day moving average zone, previous support-turned-resistance |
Price Action Analysis
The break below 1.1500 is technically significant. This level held as support throughout February and early March, with multiple tests before finally giving way last week. The clean break suggests momentum has shifted decisively in favor of the dollar.
The weekly candlestick shows a bearish engulfing pattern, with the close well below the prior week’s low — a continuation signal that sellers remain in control. Volume increased on the breakdown, confirming genuine selling interest rather than a liquidity gap.
For the bearish case to continue, EUR/USD needs to stay below 1.1500 on any retest. A daily close back above 1.1500 would invalidate the breakdown and suggest a false break — a potentially strong bullish signal.
Moving Averages
- 20-day EMA: Sloping downward, currently near 1.1540 — acting as dynamic resistance
- 50-day SMA: Near 1.1600 — the pair traded below this level for the first time in 6 weeks
- 200-day SMA: Near 1.1720 — well above current price, confirming the medium-term downtrend
The 20-day crossing below the 50-day would form a bearish crossover (often called a “death cross” on shorter timeframes), which could accelerate selling pressure if confirmed this week.
Key Economic Events This Week
This is a critical week for EUR/USD with central bank decisions on consecutive days:
Wednesday, March 18 — Federal Reserve Day
| Time (ET) | Event | Forecast | Previous |
|---|---|---|---|
| 8:30 AM | Core PPI m/m | 0.3% | 0.8% |
| 8:30 AM | PPI m/m | 0.3% | 0.5% |
| 2:00 PM | FOMC Rate Decision | 3.75% | 3.75% |
| 2:00 PM | FOMC Economic Projections | — | — |
| 2:00 PM | FOMC Statement | — | — |
| 2:30 PM | Fed Chair Press Conference | — | — |
What to watch: Markets expect rates to hold at 3.75%. The real catalyst will be the updated dot plot and economic projections. Any shift toward fewer 2026 rate cuts would strengthen the dollar further, while dovish surprises could trigger a EUR/USD short squeeze.
Thursday, March 19 — ECB Day + US Data
| Time (ET) | Event | Forecast | Previous |
|---|---|---|---|
| 8:30 AM | US Unemployment Claims | 215K | 213K |
| 8:30 AM | Philly Fed Manufacturing | 17.5 | 16.3 |
| 9:15 AM | ECB Rate Decision | 2.15% | 2.15% |
| 9:45 AM | ECB Press Conference | — | — |
| 10:00 AM | US New Home Sales | 723K | 745K |
What to watch: The ECB is expected to hold rates at 2.15%. Lagarde’s press conference tone will be key — any hints of concern about the eurozone growth outlook or inflation undershooting would weigh on the euro. Combined with US employment data the same morning, this session could see extreme volatility.
Monday, March 16
| Time (ET) | Event | Forecast | Previous |
|---|---|---|---|
| 8:30 AM | Empire State Manufacturing | 4.0 | 7.1 |
Trading Outlook
Scenario 1: Bearish Continuation (Base Case)
If both the Fed and ECB maintain current stances, the rate differential continues to favor the dollar. EUR/USD could test 1.1400 by week’s end, with 1.1350 as an extended target if risk-off sentiment intensifies.
Triggers: Hawkish Fed dot plot, dovish ECB tone, escalating geopolitical tensions.
Scenario 2: Bullish Reversal
A dovish Fed surprise (signaling more cuts in 2026) combined with a resilient ECB could trigger a short squeeze back above 1.1500. Reclaiming 1.1550 would shift the near-term bias to neutral.
Triggers: Dovish Fed projections, hawkish ECB surprise, geopolitical de-escalation.
Scenario 3: Choppy Range
Mixed signals from both central banks could trap EUR/USD in a 1.1400–1.1550 range, with sharp intraday moves but no clear weekly direction. This would favor range-trading strategies.
Risk Management Note
With two major central bank decisions in the same week, position sizing should be reduced. Expect:
- Widened spreads during rate announcements
- Potential gaps at the open following late announcements
- Whipsaw price action during press conferences
Traders using our free SteadyPips EA should consider tightening risk parameters ahead of FOMC and ECB, or pausing the EA during the announcement windows. GridMaster EA users should widen grid spacing to account for increased volatility.
This analysis is for educational purposes only and does not constitute financial advice. Trading forex carries significant risk. Past performance is not indicative of future results.
Further Reading
- What Is Grid Trading in Forex? — Learn how grid trading works and when to use it
- Technical Analysis Basics: Reading Charts
- Forex Trading Sessions: Best Times to Trade
- Forex Risk Management Guide
- Download Free Trading EAs — Automate your trading with SteadyPips and GridMaster