While the euro, the pound sterling and other risky assets have retraced some losses against the US dollar, IMF Managing Director Kristalina Georgieva warned that the war in the Middle East will be a test of the global economy's resilience and cautioned that new shocks of various forms and scales are likely to continue.

Georgieva stressed that the interconnectedness of modern markets, supply chains and financial systems has turned a local crisis into a global stress test. The resilience so often discussed after previous shocks will now be truly tested by "fire and steel." The most sobering part of her remarks was not a recap of current difficulties but a bleak forecast: the world must prepare for ongoing shocks that will likely keep coming. These shocks, she said, can be chameleonic — ranging from cyberattacks on critical infrastructure to sudden shifts in the monetary stance of key players, from food crises in vulnerable regions to new waves of forced migration that destabilize entire continents.

Her warning was framed not as a mere statement of risk but as a call to action for governments and central banks.

Highlighting the IMF's concern for the human suffering caused by the Middle East crisis, Georgieva cautioned that a protracted conflict could affect energy prices, market sentiment, economic growth and inflation, placing new burdens on policymakers worldwide. "We live in a world of increasingly frequent and unexpected shocks," Georgieva said at a conference. "In most cases, we cannot predict exactly what they will look like. But we can always strive to be better prepared for them."

Meanwhile, Iran's retaliatory actions to US-Israeli strikes have already disrupted shipping and oil flows through the Strait of Hormuz. Rising energy prices are expected to spur inflation and harm global growth. Another factor is tariff instability, which Georgieva warned last month could undermine even the US economy's resilience.

As recently as January, the IMF raised its global growth forecasts to 3.3% for 2026 and 3.2% for the following year.

Technical outlook for EUR/USD

Buyers now need to reclaim 1.1635. Only that will allow a test of 1.1670. From there, the pair could reach 1.1710, but doing so without support from major players will be difficult. The most distant upside target is 1.1745. On the downside, significant buyer interest is likely only around 1.1590. If there is no buying there, it would be prudent to wait for a new low at 1.1550 or open long positions from 1.1525.

Technical outlook for GBP/USD

Pound buyers need to take the nearest resistance at 1.3350. Only that would allow targeting 1.3380, above which a further breakout will be difficult. The most distant upside target is 1.3420. On the downside, bears will try to seize control of 1.3300. If they succeed, breaking that range would deal a heavy blow to the bulls and push GBP/USD down to 1.3255 with the potential to extend to 1.3215.