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De-Escalation Headlines Weigh On Greenback, Bolsters Euro

FOREX
  • Newswires suggesting that Russia are to begin withdrawing forces from Kyiv have bolstered risk sentiment across global markets, weighing on the US dollar. The greenback remains bottom of the G10 pile and in turn, EURUSD briefly rose back above 1.11 as the single currency came back into favour.
  • EURUSD made a clean break of the 20-day EMA that marked initial resistance at 1.1043 and traded up to key near-term resistance at 1.1137 - the high from March 17.
  • Dollar weakness was fairly broad based, however, the USDJPY sell-off was as much to do with positioning and a continuation of the unwind from overbought technical conditions. USDJPY registered another huge 232 pip range on Tuesday, retreating from 124.30 highs. The pair’s decline was accelerated on the Russia/Ukraine news, briefly matching the first significant support just below the 122 handle and within one pip of the Monday lows of 121.97.
  • Despite major equity benchmarks trading in the green, relative underperformance was evident in the likes of AUD, GBP and CAD, as much of the price action was focused around EUR and JPY crosses.
  • Late comments have included Blinken not seeing 'real signs of seriousness' from Russia on pursuing peace whilst Biden most recently says 'we'll see' if Russia follows through on its de-escalation. Developments will be crucial as to whether the Euro can gain further traction to the topside.
  • Japanese retail sales and ANZ Kiwi Business confidence highlight the APAC data schedule before regional releases of German CPI throughout the European session. Additionally, potential comments from ECB’s Lagarde, due to speak at an event hosted by the Bank of Cyprus.
  • Final GDP readings headline the US docket along with March ADP employment data ahead of Friday’s Non-farm payrolls report.
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