EUR/USD and crude oil forecast: Forex Friday | March 13, 2026

Crude oil is continuing to dictate direction for markets as we head towards the end of a volatile week. Brent oil traded above $100 per barrel overnight and that saw indices drop across the board while the dollar extended its upsurge. But as oil came back down a bit, those moves unwound in unison, and the euro also found some mild support at its lows. However, the pressure remains with no end in sight in the Middle East conflict. We could yet see more gains for oil prices while the EUR/USD could break further lower now that it has taken out the 1.1500 handle. Our EUR/USD forecast remains tilted to the downside owing to elevated risks of oil pushing even higher.

 

 

Crude oil forecast: Markets seeking equilibrium oil price

 

The volatility in oil prices is understandable. Traders are trying to figure out what a fair value for crude oil is right now, given the big release of emergency oil reserves, and the temporary relaxation of sanctions on Russian oil sales that’s already at sea. This decision follows the big uprise in oil prices as a result of the US-Israel strikes on Iran and Tehran’s retaliatory attacks across the Gulf. Those retaliatory attacks have effectively blocked transit through the strategically important Strait of Hormuz. Roughly 20% of global oil supply normally passes through this narrow waterway, and disruptions there are halting tanker traffic and raising concerns about global energy supplies. So far, the market hasn’t been convinced that the measures taken by the West will offset the ongoing disruptions in the Strait of Hormuz. If Brent starts rising back above $100 and holding there later today, then risk assets could come under renewed pressure. Short-term support is around $97.50.

 

 

EUR/USD forecast: Dollar remains supported for now entirely by oil

 

Geopolitical tensions intensified this week, and crude oil prices surged, leaving risk appetite low. Market reactions followed Mojtaba Khamenei’s confirmation that the Strait of Hormuz closure could remain a strategic tool against adversaries. He also warned of potential additional fronts if the conflict persists, contingent on national interests. These comments quickly rippled through financial markets, causing oil prices to surge again. Brent crude oil briefly broke above $100 before falling back. In response, the US dollar has staged a powerful rebound during this conflict, and at first glance it might seem counterintuitive. After all, markets are increasingly pricing the possibility of tighter policy from other central banks. Normally, that would weigh on the greenback. Yet the opposite is happening, because a) the US is an energy exporter, and b) the oil shock is having a big negative economic impact on economies that rely on energy imports. This is keeping the EUR/USD forecast tilted to the downside.

 

The situation in the middle east is volatile and could deteriorate over the week. Reports that Iran had deployed mines in the Strait of Hormuz quickly reminded markets that the geopolitical situation could still deteriorate. With the risk of disruption to global energy supply rising again, the mood is turning defensive — and the dollar should remain in demand as a result. Elevated oil prices are forcing markets to reassess inflation risks, which in turn has triggered a hawkish repricing of interest-rate expectations and raising risks of stagflation.

 

How much further can the dollar run?

 

In the short term, there may not be a clear ceiling for the greenback. It all depends on the situation with Iran. If the conflict drags on and disruptions in the Strait of Hormuz persist longer than expected, then I can’t see why traders will start selling the dollar aggressively, beyond normal profit--taking here and there. That would likely push oil prices higher, tighten financial conditions and potentially trigger a deeper sell-off in equities. Over time, such conditions could tip the global economy towards recession.

 

If the political pressure mounts as oil prices push back into triple-digit territory and equity markets come under renewed strain, then we may see Trump doing a “TACO” and signals an abrupt de-escalation. The market reaction could mirror what we saw when Trump hinted the conflict might end soon — only on a much larger scale. But for now, the combination of geopolitical uncertainty, higher oil prices and the unwinding of heavy short positions continue to provide strong support for the US dollar, keeping the EUR/USD forecast tilted to downside.

 

 

With 1.15 handle taken out, this is now the most important resistance to watch on the EUR/USD, followed by 1.1530 and then 1.1578. The next potential downside targets it he August 2025 low of 1.1391.

 

Source for all charts used in this article: TradingView.com

 

 

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R