Reports of progress in peace talks between Russia and Ukraine lifted the euro

• The dollar had risen as much as 3.4% since Russia invaded Ukraine, declined 0.596% to 98.496
• Any step toward a ceasefire or potential peace deal in Ukraine would support the euro
• The Japanese currency had fallen to its lowest level since 2015 on Monday

Forex market

The dollar fell against a basket of peer currencies yesterday as reports of progress in peace talks between Russia and Ukraine lifted the euro and reduced the safe-haven appeal of the greenback. 

Russia said in talks in Istanbul yesterday that it would scale down military operations around Ukraine's capital and north, while Kyiv proposed adopting neutral status, in confidence-building steps that were the first signs of progress towards negotiating peace. The dollar, which had risen as much as 3.4% since Russia invaded Ukraine, declined 0.596% to 98.496, as traders looked to currencies deemed riskier.

Economic Calendar

Risk appetite is back and I think you're seeing potentially a major turning point in the war in Ukraine as Russia signals talks have been constructive and there's hope that there could be a ceasefire. The euro was up 0.81% at $1.1076, having earlier hit its highest level since March 17. The euro today is enjoying a relief rally built on constructive peace talks, lower oil, and expectations that eurozone data this week could strengthen the case for the ECB (European Central Bank) to raise interest rates. 

Any step toward a ceasefire or potential peace deal in Ukraine would support the euro, as Europe is seen suffering a significant economic blow from the conflict, which began with Russia's invasion on Feb. 24 and sent energy prices soaring. 

Day Trading or Swing Trading?

Inflation figures of eurozone members for March will begin to roll in on Wednesday, with the composite release on Friday. The greenback slid 0.89% against the yen to 122.83 yen. The Japanese currency had fallen to its lowest level since 2015 on Monday. Japanese Finance Minister Shunichi Suzuki said the government would closely watch currency moves to prevent a "bad" weak yen that hurts the economy. While the comments from Japanese officials overnight are unlikely to reverse the yen weakening trend on their own, they should at least help to slow the recent fast pace of yen selling. 

The Bank of Japan continued to defend a key yield cap by offering to buy unlimited amounts of 10-year government bonds.

Smart Trading Tools

Euro-EUR

The single currency gained as markets took a positive view on peace talks in Ukraine. Heavily sold on fears of the economic fallout from the war in Ukraine and nerves about the risk of the conflict spreading west, the euro has been a beneficiary of hopes for peace. Markets appear to have taken an optimistic stance before peace talks have yielded any result. Overall, the EUR/USD traded with a low of 1.0979 and a high of 1.1036 before closing the day around 1.0981 in the New York session.

Japanese Yen-JPY

The Japanese Yen fought recovered from seven-year lows as traders speculated that officials were uncomfortable with its recent weakness. Equity markets continued a pick-up in sentiment on Wall Street as markets became hopeful that the Ukraine conflict could end - although this move ran out of steam as European shares opened in the red. Overall, the USD/JPY traded with a low of 121.16 and a high of 122.41 before closing the day around 122.13 in the U.S session.

Best Forex Trading Platform

British Pound-GBP

The British Pound rose against the dollar after Ukrainian and Russian negotiators announced progress in their peace talks. Russia promised to scale down its military operations around Kyiv and northern Ukraine, while Ukraine proposed to adopt a neutral status with international guarantees to protect it from attack. Overall, the GBP/USD traded with a low of 1.3157 and a high of 1.3223 before closing the day at 1.3183 in the New York session.

Canadian Dollar-CAD

The Canadian Dollar edged higher as signs of progress in peace talks between Russia and Ukraine boosted investor sentiment. Canada's curve has been flattening as investors bet the country's central bank will begin hiking its key interest rate in 50 basis point increments, with the first of the rarely used upsized moves possibly coming as soon as next month. Overall, USD/CAD traded with a low of 1.2462 and a high of 1.2550 before closing the day at 1.2473 in the New York session.

Trading Signals and Trading Forecasts

Australian Dollar-AUD

The Australian Dollar has been hovering around 75 cents for a week now, as geopolitical and fundamental drivers are unable to give clear direction. The geopolitical landscape emanating out of the Ukraine war has added to positive investor sentiment inequities, with Russia saying that they are open to negotiation for de-escalation. Overall, AUD/USD traded with a low of 0.7358 and a high of 0.7416 before closing the day at 0.7410 in the New York session.

Euro-Yen EUR/JPY

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 61 and lies above the neutral zone. In general, the pair has lost 0.30%.

Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 60 reading and lies above the neutral zone. On the whole, the pair has lost 0.19%.

Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 76 reading and lies above the neutral region. In general, the pair has lost 0.11%.

Customize your trades with cutting-edge widgets, trading apps, and charts

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 53 and lies below the neutral region. Overall, the pair has lost 0.12%.

Sterling-Swiss GBP/CHF

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 45 and lies below the neutral region. In general, the pair has gained 0.02%.

Elliott wave forex trading idea for AUD/USD and USD/JPY acceleration

###

All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.