Five FX pairs you should be watching in March 2026 and why

• March 2026 is set to be a bumper month for financial markets, with the RBA, Fed, BoC, BoJ, ECB, BoE, and SNB all expected to vote on monetary policy in the three days between March 16th and March 19th.

With the third month of 2026 already underway, let’s touch base on five of the currency pairs to have on your watchlist in March.

Read the previous edition here: Five forex pairs you should be watching in February 2026 and why

To my memory, I don’t think there’s been a single edition of pairs to watch I’ve written that hasn’t included EUR/USD, and rest assured, this time won’t be the exception.

As long as the Federal Reserve remains one of the most watched central banks globally in the current period of monetary policy transition, it would be remiss not to make at least some mention of the world’s most traded currency pair¹.

On that basis, EUR/USD enters March having lost around 0.6% in value throughout February, with exchange pricing hitting 55-month highs the month previous.

Between the two currencies, the euro has relatively consistently outperformed the dollar in the last twelve months, which, at least in some capacity, can be explained by current stances on monetary policy:

• ECB: Especially considering the years prior, the ECB has achieved relative calm in monetary policy, with some suggesting that its current rate of 2.00% marks the end of its easing cycle. If nothing else, this perceived level of decision-to-decision predictability is boosting euro value, with both inflation and employment relatively under control³.
• Federal Reserve: Discounting chaos around the Federal Reserve chairman to succeed Powell, the Federal Reserve is on a much different footing than the ECB, with recent numbers proving core PCE inflation to be somewhat sticky and, importantly, well over the Fed’s target of 2%⁴. Simultaneously, however, fourth-quarter GDP estimates for 2025 have left something to be desired⁵, leaving the Fed in a difficult position and encouraging speculation about how the Fed will vote in mid-March.

In a nutshell, as long as the narrative remains unchanged, perceived levels of comparative policy stability between the ECB and the Federal Reserve continue to favor the euro, compounded by an expectation that the gap in policy rates will be lower by year end, decreasing the yield gap and therefore the use case of holding dollars over euros.

• On a technical front, EUR/USD price action remains well-supported by a series of simple moving averages. If able to break above the 1.20000 key level, this could pave the way for a move towards resistance around 1.22313, but this would depend heavily on both the Fed and the ECB's monetary policy expectations.

While a wildcard pick is not something typical for my contribution to the pairs to watch series, if asked, USD/JPY would be my selection for the next 30 days.

As the chart above shows, the yen has been increasingly volatile in recent years, a trend that coincides almost entirely with the tenure of BoJ governor Kazuo Ueda, who has drastically changed the monetary policy stance from that of his predecessor, Haruhiko Kuroda.

Put simply, the yen’s position amongst its peers is changing, and markets remain volatile as the currency finds its footing after a decade of ultra-dovish policy.

Read more on monetary policy, including the Bank of Japan: Monetary Policy Desync: Why are global central banks moving in different directions?

While recent hawkish remarks from Ueda⁷ would typically introduce some USD/JPY selling pressure, with the Fed currently easing, this is doubled when considering that any decrease in the yield advantage between the two currencies continues to pressure the 2024 carry trade.

Not to mention the recent commitment by the BoJ⁷ to prop up yen pricing by intervening in FX markets where necessary; yen markets are due for a busy March, especially with the BoJ meeting on March 19th.

On technicals, I would pay particular attention to how USD/JPY reacts around the key level of 150.000, with a breach of this level offering a leg down to previous support.

Somewhat predictably, I’ve selected AUD/USD as my third pick for pairs to watch in March, but to be totally transparent, much of the reason why is shared by multiple Aussie pairs.

Amongst the best performing major currencies of 2026 year-to-date, the Australian dollar is currently gaining in value for two main reasons:

• RBA hawkish stance: There’s no secret that, owing to sticky inflation⁸, the RBA is more hawkish than other major banks, following a recent decision to raise rates to 25bps to 3.85%⁹. With many looking for the highest yield on investment when buying currencies, the Aussie offers the highest cash rate amongst other major currencies, providing buying support.
• Precious metals: Albeit less of a factor than the above, you’d have to be completely detached from financial markets to be unaware of the recent rally in metal pricing. While minds turn to precious metals when reflecting on last year, copper prices have also increased by almost 200% since April 2020. With Australia a major exporter of metals¹⁰, this increase in profitability offers upside to AUD, as rising crude prices would support CAD.

While AUD/USD has slid lower over the last 10 years, recent upside has challenged the previous February 2023 highs of ~0.71490. On a monthly timeframe, the RSI suggests this upside has some room to run on a technical level.

It would be fair to say that at the moment, there’s not much to write home about regarding the UK economy. Between heightened sovereign debt¹¹, rising unemployment¹², and less-than-stellar economic growth¹³, March has all the makings of an interesting month for sterling markets, with both a spring forecast from Chancellor Rachel Reeves and a BoE rate decision mid-month.

I say “not out” only in the sense that GBP/USD pricing has recently found some buying support, primarily on matters of monetary policy, with a razor-thin 5-4 vote to maintain rates at 3.75% in the BoE’s most recent decision proving that, in some regards, the BoE is more hawkish than the Fed.

With that said, as unemployment continues to rise¹² and economic growth slows¹³, the idea that Governor Andrew Bailey and his team of policymakers may have to cut in their upcoming decision is growing, especially after recent dovish remarks¹⁴.

In a few words, March is adding up to be a bumper month for GBP/USD markets.

On the technical front, monthly bolinger bands would suggest that there is still upside possible for GBP/USD, with the key level of 1.31000 acting as support. If price is to fall under this level, especially in the wake of the spring forecast, this could inspire a leg down towards ~1.23055.

In a segway from all things Bank of England, USD/CAD has lost almost 5.00% in value since Canadian Prime Minister Mark Carney assumed office, having previously traded at five-year highs of around 1.47937.

With the BoC policy rate maintained at 2.25% since October¹⁵, partly due to domestic pressures like expected housing starts falling to multi-year lows in important regions¹⁶, the next thirty days will likely see the continuation of a conversation on North America trade, courtesy of the Canada–United States–Mexico Agreement (CUSMA).

Albeit Mark Carney’s reputation in previous lines of work has likely helped stabilize CAD pricing, the mandatory joint review scheduled in April for the CUSMA could present an opportunity for Trump to impose more targeted sectoral tariffs in a further bid for American protectionism.

The outcome of this discussion will be one of the leading forces in CAD pricing across the next thirty days.

Currently, USD/CAD is trading rangebound between ~1.41090 and ~1.28650. If price can make a bid for above ~1.38563 in March’s trading, this could make way for a challenge of the upper boundary.

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Footnotes

¹OTC foreign exchange turnover in April 2025

²Deutsche Bank says ECB at terminal rate, expects next move to be hike in late 2026

³ECB Monetary policy decisions, February 5 2026

⁴Core inflation rate held at 2.9% in August, as expected, Fed’s gauge shows

⁵Economy Fourth-quarter U.S. GDP up just 1.4%, badly missing estimate; inflation firms at 3%

⁶CME Group, FedWatch

⁷Summary of Opinions at the Monetary Policy Meeting, February 2 2026

⁸Australia Inflation Rate, TradingEconomics
⁹Statement by the Monetary Policy Board: Monetary Policy Decision, February 3 2026

¹⁰Global mine production, June 12 2025

¹¹Net Debt (excluding public sector banks) as a % of GDP

¹²Unemployment rate (aged 16 and over, seasonally adjusted)

¹³Gross Domestic Product: Quarter on Quarter growth

¹⁴Bank of England's Bailey says March rate cut is 'genuinely open question'

¹⁵Policy interest rate, Bank of Canada

¹⁶Housing Market Outlook 2026, CMHC