Forex Market Forecast for March 2024

Nick Ranga

Forex Market Forecast | March 2024

With US inflation rising more than expected in January, traders and analysts have had to reassess their view on the potential rate-cutting cycle this year. Meanwhile, the UK fell into a technical recession, but retail sales jumped in January. Everything seems to be a bit up in the air at the moment, although the AI-led surge has helped equity markets. Here are some key points to consider for March:

  • Of course, we have to start with inflation. But make sure to keep an eye on inflation in other regions as well, not just the US. For example, in the UK, inflation held steady at 4% in January despite an expected increase. Inflation data released in March will provide key insights and volatility in FX pairs.
  • The US economy added 353,000 jobs in January, better than expected. However, given the increase in layoff announcements, we could start to see unemployment creep higher, impacting how the Fed views rates.
  • The European economy and euro are something to keep an eye on next month, with the European Commission’s new forecast pointing to a faster decrease in inflation and lower growth rates than anticipated in 2023.

US Dollar

After starting the first two weeks in February well, the US dollar has been somewhat of a mixed bag, giving up its gains against some currencies and remaining solid vs. others. However, given the unexpected inflation data, we see the Fed continuing its wait-and-see approach when it comes to rate cuts, which may provide the dollar with slight strength in March. Any change in the data (weakening jobs, decreasing inflation) could result in a turnaround and see the dollar weaken. So, keep an eye on the economic data releases.

Key Levels

  • EURUSD: Higher – 1.1000, Lower – 1.0623
  • GBPUSD: Higher -1.2790, Lower – 1.2534
  • USDJPY: Higher – 151.70, Lower – 147.26


As we mentioned above, the European Commission’s new forecast points to a faster decrease in inflation and lower growth rates than anticipated in 2023. Meanwhile, data from Germany continues to disappoint, suggesting there could be further headwinds for the euro. Alongside the technical reasons we spoke about last month (the strong downtrend), we see the euro potentially moving lower against the US dollar in March.

Key Levels

  • EURUSD: Higher – 1.1000, Lower – 1.0623
  • EURGBP: Higher – 0.8620, Lower – 0.8500

British Pound

Despite a drop against the USD at the start of the month following non-farm payroll data, the GBP has again remained resilient. The latest inflation reading showed the rate of rice increases remained steady in January, despite an expected increase. Meanwhile, UK retail sales rebounded in the first month of 2024, providing a positive for the UK economy. On the other hand, figures showed that the UK fell into a technical recession at the end of 2023. Assessing the GBPUSD chart, we think the GBP may fare better than some other major currencies in March.

Key Levels

  • EURGBP: Higher – 0.8620, Lower – 0.8458
  • GBPUSD: Higher -1.2790, Lower – 1.2534

Japanese Yen

Japan also dropped into a technical recession in the final few months of 2023, while the country’s economy fell one place to fourth in the list of the world’s largest economies. The yen, unsurprisingly, weakened in February, and according to Bloomberg, asset managers have increased their bearish positions on the yen to the most in more than a year. Looking at both macro and technical analysis, it’s hard to argue against a weakening yen in March. However, it’s important to be aware of a Reuters report that states the Bank of Japan is on track to end negative interest rates in the coming months, which could result in a sharp turnaround for the yen. Overall, we are sitting on the sidelines for the yen but suggest remaining cautious and staying up to date with the latest news if you do trade the pair over the coming months.

Key Levels

  • USDJPY: Higher – 151.70, Lower – 147.26
  • EURJPY: Higher – 164.27, Lower – 159.80

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