Unproductive diplomatic talks between Moscow and Kyiv

Market Update

The fact that the diplomatic talks between the two countries did not yield any concrete agreements did put off investor’s optimism towards peace talks and has resulted in increased appetite for the US dollar.

The Dollar Index reclaims loses against foreign currencies during European session open. The Dollar Index found a near-term support above 96.60 after filling up a price action gap created between 96.60 and 97.20 on February 28, 2022.

The EURUSD slid lower during European session with German Manufacturing PMI indicating less than expected figures. ECB President Lagarde will be speaking later pre-New York session and US President, Joe Biden will also be speaking later in New York session and investors will be paying attention.

Greenback bulls remains challenged with near-term resistance at 97.40 and a break above that area could cause buyers to extend targets towards 98.00. The EURUSD is also down below 1.1200 as the pair continue to suffer selling pressure in the near-term.

The EURGBP edged lower early European session breaking below 2 days low. The pair is currently trading towards 0.8300 near-term support. The pound was boosted by positive Manufacturing PMI reflecting growth in February.

Despite the Reserve Bank of Australia leaving the monetary policy unchanged the AUDUSD traded higher early Tuesday morning. The RBA indicated monetary policy shifts may likely happen mid-year giving optimism to investors in the near-term.

The AUDUSD has a near-term resistance at 72.80 and bulls seem to give in gains in the near-term. Investors turns their focus on the coming GDP data for Australia due for release early Wednesday.

European Stock index futures traded lower, during European session as Russian financial sanctions are beginning to mount downside pressure on European banks. The FTSE100 was down -0.25%. Shell stocks were also down -1.90% as the company halted its operations in Russian.

US Indices closed lower on Monday, with S&P500 falling -0.24%, Dow Jones declining -0.49% and bears target 14000 psychological support. Nasdaq 100 was up +0.34%, although gains remain capped with 14600 near-term resistance.

Crude oil futures rallied early Tuesday morning, as several Russian banks become excluded from the SWIFT payment system on Monday, making payments for deliveries more difficult to process.

US WTI was up +4% closer to $100/barrel as supply channels continue to suffocate amid rising demand.