Dollar Dips as Markets Eye Data and Conflict (03.31.2026)

Markets showed mixed signals as a softer U.S. dollar allowed EUR/USD to hold near 1.1500, with investors turning attention to upcoming Eurozone inflation and German retail data. 

The Japanese yen maintained strength near the 160 level amid continued intervention warnings, while sterling weakened to multi-month lows under persistent risk aversion and rising inflation concerns. In commodities, gold attempted to recover despite being on track for its worst monthly drop in years, while silver rebounded modestly but remained under pressure. Overall, sentiment remains fragile as geopolitical tensions and shifting rate expectations continue to dominate market direction.

EUR/USD Trades Near 1.1500

The EUR/USD pair is trading near the 1.1500 level, rebounding as the U.S. dollar softens despite persistent safe-haven demand. Investors are now shifting their focus toward upcoming German Retail Sales and Eurozone HICP inflation data for fresh directional cues. Sentiment improved following reports that Donald Trump may be open to ending the conflict with Iran without demanding the reopening of the Strait of Hormuz, which weighed on the dollar. Additionally, Fed Chair Jerome Powell noted that long-term inflation expectations remain stable, helping to temper aggressive interest rate forecasts.

For EUR/USD, the initial resistance is seen at 1.1510, while the closest support is positioned at 1.1410.

Yen Holds Gains Near 160

The Japanese yen settled around 159.6 per dollar on Tuesday, maintaining recent gains as intensified verbal warnings from Tokyo increased intervention expectations. Currency chief Atsushi Mimura reaffirmed that the government is prepared to act decisively, echoing recent stances from Finance Minister Satsuki Katayama.

These official cautions followed the yen’s brief slide beyond the critical 160 level, a threshold that previously triggered market intervention in July 2024. Despite this support, the currency remains pressured by surging oil prices fueled by the Middle East conflict, which disproportionately impacts Japan due to its heavy reliance on energy imports.

Technically, resistance stands near 160.50, while support is firm at 159.30.

Gold Hits Volatile Month

Gold climbed toward $4,600 per ounce on Tuesday as easing oil prices provided some relief, but the metal remains on track for roughly a 13% decline in March, its worst monthly performance since October 2008. Throughout the month, gold has been pressured by an oil-driven inflation shock that pushed both investors and central banks toward a more hawkish stance on interest rates. The Middle East conflict has now entered its fifth week with no signs of easing, with Iran effectively shutting the Strait of Hormuz and threatening Red Sea shipping.

Gold sees support near $4420, while resistance is around $4580.

Sterling Hits Four-Month Low

The British pound drifted toward $1.32, marking its weakest level since early December and a monthly decline of over 1%. Persistent risk aversion, fueled by potential U.S. ground operations in the Middle East, continues to overshadow nascent progress in Iran negotiations. The Bank of England’s outlook has shifted dramatically; markets now anticipate at least two rate hikes in 2026, with a 70% probability of an increase as early as next month. This hawkish turn reflects growing fears that energy-driven inflation will remain sticky.

From a technical view, support stands near 1.3100, with resistance around 1.3250.

Silver Rebounds Above $72

Silver climbed past $72 per ounce on Tuesday as cooling oil prices provided brief relief. Despite this recovery, the metal is set for a monthly decline exceeding 20%, marking its sharpest drop since September 2011. Throughout March, precious metals faced persistent pressure from an energy-driven inflation shock, which spurred investors and central banks to adopt increasingly hawkish interest rate expectations to counter rising costs.

From a technical view, resistance stands near $72.5 while support is located around $67.50.