As we head into a week packed with major central bank meetings, global markets are bracing for a cautious tone from policymakers. The Federal Reserve, European Central Bank (ECB), Bank of England (BoE), and Bank of Canada (BoC) are all widely expected to leave interest rates unchanged, but guidance around inflation risks and the timing of future rate cuts could still trigger significant volatility across FX markets.

Rising energy prices, ongoing geopolitical tensions, and still-resilient economic growth are forcing central banks to walk a delicate line. While inflation has cooled from its peak, the risk of it reaccelerating above target levels means policymakers may keep rates higher for longer.

Below is a breakdown of what to watch this week — and how GBP/USD and EUR/USD technical setups could react.

Macro Outlook: Central Banks Likely to Stay on Hold

United States – Federal Reserve

The Federal Reserve is widely expected to hold interest rates steady this week.

Recent economic data has shown some cooling in the labour market, with job creation slowing and unemployment edging higher. However, the broader economy continues to demonstrate resilience, keeping policymakers cautious about cutting rates too quickly.

One major concern is the recent rise in energy prices, which could push inflation back above the 3% level. Because of this risk, the Fed may signal that rate cuts could be pushed further into the future, with markets beginning to consider the possibility that meaningful easing may not arrive until much later than previously expected.

Markets will be particularly focused on:

• Updated economic projections
• Any shift in the dot plot
• Guidance around the timing of future rate cuts

A more hawkish tone could strengthen the US dollar across the board.

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Eurozone – European Central Bank

The ECB is also expected to keep interest rates unchanged.

Like the Fed, policymakers are facing renewed inflation risks, largely due to rising energy prices and geopolitical tensions in the Middle East. Energy inflation historically feeds quickly into broader price pressures across the eurozone.

Because of this backdrop, the ECB may adopt a more cautious and hawkish stance, reinforcing the idea that they remain ready to tighten policy again if inflation proves persistent.

Markets will watch for:

• Any comments about energy-driven inflation
• Language around future tightening risks
• Guidance on the timeline for policy easing

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United Kingdom – Bank of England

The Bank of England is also expected to leave rates unchanged, with policymakers likely to emphasize continued caution.

Earlier expectations for a March rate cut have largely faded, primarily due to the same global factor affecting other economies: rising energy costs.

Instead of focusing on the decision itself, markets will closely monitor the vote split within the Monetary Policy Committee.

Key focus:

• Number of members voting for a rate cut
• Any change in tone around inflation persistence

If more policymakers than expected vote for cuts, markets could interpret that as a dovish signal, potentially weakening the pound.

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Canada – Bank of Canada

The Bank of Canada is also expected to leave interest rates unchanged at its upcoming meeting, as policymakers continue to balance cooling domestic growth with persistent inflation risks.

While Canadian inflation has eased from its peak, the recent rise in global energy prices could slow the disinflation process. Energy costs feed directly into Canada’s inflation outlook, particularly through fuel and transportation prices.

Because of this, the Bank of Canada is likely to maintain a wait-and-see approach, keeping policy restrictive while monitoring incoming economic data.

Officials have previously signalled that the current policy stance is already sufficiently restrictive, suggesting there is little urgency to adjust rates unless economic conditions shift materially.

Markets will be watching closely for:

• Any updates to the inflation outlook
• Comments on the impact of energy prices
• Signals about the timing of future rate cuts

If the Bank maintains a more cautious tone, it would reinforce the broader global theme emerging this week — central banks remaining patient before moving toward policy easing.

Technical Analysis

GBP/USD – Descending Channel Support in Focus

From a technical perspective, GBP/USD remains firmly within a descending channel, highlighting the broader bearish structure that has developed over recent weeks.

Price action has consistently respected both the upper resistance trendline and the lower support boundary of the channel.

Recently, the pair attempted a short-term recovery, briefly retesting the mid-to-upper portion of the channel before facing rejection. This suggests that sellers remain in control of the broader trend.

The latest breakdown through the horizontal support zone reinforces the bearish momentum.

Key Technical Scenario

If central banks maintain rates and the Federal Reserve delivers a relatively hawkish message, the US dollar could strengthen further. In that case, GBP/USD may continue its move toward the lower boundary of the descending channel.

This lower trendline could act as a technical support area, where buyers may step in and slow the decline.

Key Levels to Watch

• Resistance: Previous support zone around 1.3350–1.3400
• Channel support: Near the lower trendline of the descending channel
• Breakdown continuation: If channel support fails, further downside could accelerate

For now, the structure favors continued downside pressure unless the pair can reclaim the broken support zone.

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EUR/USD – Ascending Channel Breakdown Targets 50% Retracement

The EUR/USD technical picture has recently shifted bearish after the pair broke below its ascending channel.

For months, the pair had been trending higher within this structure, but the breakdown suggests a loss of bullish momentum and a potential deeper correction.

Once a channel breaks, price often seeks out the next major Fibonacci retracement level of the prior trend.

Key Target: 50% Fibonacci Retracement

The next significant support sits near the 50% retracement level around 1.113, which also aligns with a major horizontal support zone.

This type of confluence — where Fibonacci levels and historical support intersect — often attracts strong market attention.

Why This Level Matters

The 1.113 area represents:

• The 50% Fibonacci retracement
• A previous consolidation zone
• A strong horizontal support level

If bearish momentum continues following the ECB meeting, EUR/USD may gradually move toward this area.

Key Levels to Watch

• Resistance: Former ascending channel support
• Intermediate support: 38.2% Fibonacci level
• Major support target: 1.113 (50% retracement)

A move toward this level would represent a healthy correction within the broader trend, rather than a full structural reversal.

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Market Themes to Watch This Week

Several macro themes could drive FX markets:

1. Central Bank Messaging
Even if rates remain unchanged, forward guidance will be key.

2. Energy Prices
Rising oil prices could reignite inflation concerns globally.

3. Geopolitical Risk
Tensions in the Middle East could continue impacting energy markets and risk sentiment.

4. US Dollar Strength
If the Fed signals higher rates for longer, the USD may remain supported.

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Final Thoughts

This week’s central bank meetings may not deliver rate changes, but the tone from policymakers could still drive major currency moves.

• GBP/USD remains in a descending channel, with downside risk toward the lower support boundary.
• EUR/USD has broken its ascending structure, opening the door for a move toward the 1.113 Fibonacci support zone.

With macro uncertainty rising and inflation risks re-emerging, the FX market could see increased volatility as traders reassess the timing of global rate cuts.