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Middle East Tensions Surging: Will the Fed Shift Market Direction?

(By ATFX Analyst Team)

Summary

  • Geopolitical Escalation: Tensions have spiked as Iran confirms the death of its National Security Chief, Ali Larijani, following Israeli airstrikes. President Trump has further fueled concerns by threatening additional strikes on Kharg Island, Iran’s vital oil export hub.
  • Fed in Focus: Markets anticipate the Federal Reserve will hold interest rates steady on Thursday. The focus is on the updated “Dot Plot,” economic projections, and Jerome Powell’s commentary on how the Middle East conflict influences the inflation outlook.
  • Market Volatility: Gold and U.S. equities face potential short-term downside if the Fed strikes a hawkish tone or emphasizes uncertainty. However, gold remains sensitive to safe-haven demand near the $5,000 level. Meanwhile, the Bank of Canada is expected to maintain rates as it balances a boost from rising energy prices against mounting domestic inflationary pressure.

Global Market Review 18/03/2026

Wall Street extended its gains on Tuesday, with energy, aviation, and tourism stocks leading the way as investors awaited a wave of central bank decisions to assess the impact of surging oil prices. The Dow rose 0.1%, the S&P 500 gained 0.25%, and the Nasdaq climbed 0.47%, while the US Dollar Index softened for a second session. Commodities saw high drama as Brent crude breached $103 per barrel and gold consolidated near $5,000; although oil prices retraced early 5% gains following news of the Strait of Hormuz closure, they remain up over 40% for the month due to severe supply fears.

Key Events Today:

  • 18:00 EU CPI YoY Final FEB **
  • 20:30 US PPI YoY FEB **
  • 21:45 BoC Interest Rate Decision ***
  • 22:30 BoC Press Conference ***

03.19 Tomorrow

  • 02:00 Fed Interest Rate Decision ***
  • 02:30 Fed Press Conference ***
  • 11:00 BoJ Interest Rate Decision ***14:30 BOJ Press Conference ***
  • 20:00 BoE Interest Rate Decision & Meeting Minutes ***
  • 20:30 US Initial Jobless Claims ***
  • 21:15 ECB Interest Rate Decision ***
  • 21:45 ECB Press Conference ***

Markets Analysis 18/03/2026

  • Resistance: 1.1573/1.1623
  • Support: 1.1460/1.1411

EUR rose 0.31% to 1.1540 as the USD drifted from 10-month highs. Easing tensions provided a brief relief, though Eurozone energy risks continue to cap the currency’s upside potential.

Analyst View: EURUSD is staging a corrective bounce within its descending channel after finding solid demand near the 1.1411 floor. The pair is now testing the 1.1540 level; however, the primary bearish trend remains intact unless price decisively reclaims the 1.1573 resistance zone. Failure to break higher may lead to a retest of the 1.1460 pivot.

Bias: Mildly bullish if it breaks above 1.1560.

  • Resistance: 1.3429/1.3457
  • Support: 1.3287/1.3253

Sterling stabilized on broad USD weakness ahead of the BoE decision. However, the shadow of the Iran conflict continues to fuel domestic inflation concerns and weigh on risk appetite.

Analyst View: GBPUSD is retracing back to the upside after rebounding from the recent support near 1.3287. However, the medium-term structure remains bearish within the descending channel, with the 1.3429 resistance level serving as a formidable ceiling for any extended recovery.

Bias: Mildly bullish if it breaks above 1.3365.

  • Resistance: 159.75/160.36
  • Support: 158.94/158.29

The Yen remains pinned near 159.00. Japan reiterated its readiness for “decisive action” as currency weakness continues to drive up energy import costs amid the regional war.

Analyst View: USDJPY is locked in a tight consolidation at the top of its bullish channel. While the 158.94 level is providing immediate structural support, the market is clearly wary of the 160.36 zone, widely viewed as a “red line” for potential intervention. Upcoming Fed decision will be the primary catalyst for a definitive breakout or a sharp corrective reversal.

Bias: Continued consolidation at high levels.

  • Resistance: 102.85/109.02
  • Support: 89.28/83.22

WTI rose nearly 2% following Iran’s third strike on the UAE. Disruption at the Fujairah port—a key global export hub—has reignited fears of severe supply deficits across global markets.

Analyst View: WTI is consolidating within its ascending channel after successfully defending the lower boundary. Price action is currently hovering near the 95.35 pivot; a sustained hold here suggests a move toward the 102.85 resistance zone. Given the regional supply threats, the bullish structure remains intact unless geopolitical tensions significantly de-escalate.

Bias: Bullish bias if it holds above $90.

  • Resistance: 5063/5131
  • Support: 4927/4841
  • Resistance: 82.59/84.00
  • Support: 76.60/75.17

Gold held steady near $5,000. Prices are caught between safe-haven demand from the Iran-Israel war and bearish pressure from a rare 1.1% market bet on a surprise Fed rate hike.

Analyst View: Gold is currently oscillating within a pivotal consolidation zone. While the psychological floor at 5,000 is being defended, the price remains capped by the 5,063 resistance level. A hawkish surprise from the Fed could trigger a break toward 4,927.

Bias: Range-bound near $5,000 pending Fed catalysts.

  • Resistance: 47544/47853
  • Support: 46522/46208

The Dow rose slightly (+0.10%) as energy stocks gained. The potential easing of Venezuelan oil sanctions provided a temporary cushion against stagflation fears that were dominant earlier in the week.

Analyst View: The index is currently trading in a downtrend. While holding above 46,522 provides a breather for bulls, the overall technical structure remains fragile. Reclaiming the 47,544 resistance zone is necessary to shift sentiment; otherwise, the primary trend remains lower toward the 46,208 floor.

Bias: Gains limited below 47,600.

  • Resistance: 25009/25282
  • Support: 24464/24196

NAS100 climbed 0.47% on the back of Nvidia’s conference and Uber’s robotaxi news. Tech stocks are attempting to decouple from inflation fears by leaning into growth and efficiency narratives.

Analyst View: The index shows resilience, currently finding solid ground near the 24,464 zone. While the recent bounce is encouraging, the price action remains capped by a descending trendline. A decisive move above the 25,009 resistance cluster is required to confirm a trend reversal; otherwise, the risk of a retracement toward 24,196 remains elevated.

Bias: Mildly bullish if it stays above 24,800.

  • Resistance: 76081/77349
  • Support: 72835/71855

BTC took a breather, trading slightly lower at $74,605 after hitting a session high near $76k. Support remains firm due to short covering, steady ETF inflows, and Mastercard’s $1.8 billion acquisition of BVNK, though Fed-related caution is capping immediate momentum.

Analyst View: Bitcoin is consolidating within its ascending channel, finding temporary resistance at the 76,081 zone. While the current momentum has paused, the price is holding comfortably above the channel’s midline. A successful defence of the 72,835 support area is vital to maintain the bullish structure for an eventual push toward 77,349.

Bias: Bullish above 72,800.

Enjoy trading! The content is for reference only. Please ensure that you understand the risk.

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.

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