The euro-dollar pair again tested the lower limit of the 1.0960-1.1050 price range, which was formed last week. EUR/USD bears tried to push through the support level of 1.0960 in order to settle below this target and in the long term go to the bottom of the ninth figure. Further, they would have opened the prospects of reaching the lower line of the Bollinger Bands indicator on the timeframe (1.0850), beyond which the horizon of the annual low (1.0806 mark) would be seen. However, it is too early to talk about such prospects: bears must first of all gain a foothold under the level of 1.0960. So far, we see only an impulse breakdown of this support level, followed by a rollback - this is clearly not enough to achieve subsequent downward targets.
It is noteworthy that the dollar was gaining momentum today ahead of tomorrow's talks between Russia and Ukraine. For the first time in the past few weeks, the parties will meet in person, and for the first time the negotiations will take place not in Belarus (and not via video link), but in Turkey. The very fact of "live" negotiations initially put pressure on the safe dollar. The level of anti-risk sentiment decreased, having a corresponding impact on the US currency. Geopolitics continues to rule the situation in the foreign exchange market, raising or lowering the overall degree of heat. Therefore, as soon as it became known about the offline negotiations, the dollar sank throughout the market. In particular, the euro-dollar pair in the first half of the day rose to the boundaries of the 10th figure, reflecting the renewed craving for risky assets.
But, as you know, geopolitical factors are a priori unreliable. More precisely, they are inherently unstable. The tone of the information flow is changing at a kaleidoscopic speed, reflecting on the mood of investors. So, in the afternoon it became known that there were no significant achievements or breakthroughs in the negotiations at the moment. By the way, similar comments were voiced last Friday by the head of the Russian delegation at the talks, Vladimir Medinsky. He said that the positions of Russia and Ukraine "are moving closer on minor issues, but on the main ones they are marking time." It also became known that following the results of tomorrow's talks, the meeting of the presidents of Russia and Ukraine is not scheduled. For example, Russian Foreign Minister Sergei Lavrov said that a meeting between Presidents Vladimir Putin and Vladimir Zelensky now would be "counterproductive." According to him, Moscow will be ready for such a meeting after reaching agreements.
This information flow allowed the EUR/USD bears to once again test the lower boundary of the range - that is, the support level of 1.0960. However, the bears faced active resistance from the bulls. Plus, the bears themselves are not confident in their abilities in the context of the further development of the downward trend. Therefore, as soon as they overcame the support level, they began to take profits en masse, thereby extinguishing the rate of price decline. Support for EUR/USD bulls was indirectly provided by German Chancellor Olaf Scholz, who today again spoke out against sending "NATO peacekeepers" to Ukraine.
Thus, the 1.0960-1.1050 price range formed last week continues to "work", although today the intraday range has narrowed to 1.0960-1.1000. But here it is necessary to emphasize that, despite the strengthening of anti-risk sentiments, traders did not leave this price echelon - the pair only impulsively and temporarily overcame its lower limit. This suggests that market participants are sensitive to the rapidly changing fundamental background, but they limit their emotions to the aforementioned range. It can be assumed that if, following the results of the next round of Russian-Ukrainian negotiations, the tone of statements will be optimistic, bulls will close (or not for long) go above 1.1050. And vice versa - bears will not go below 1.0960 in case of strengthening of pessimism. In my opinion, traders will keep the price range until the announcement of any specific political decisions following the results of the general negotiation process. Unfortunately, it is almost impossible to predict or predict the dynamics of negotiations, so at the moment it is best to take a wait-and-see attitude.
However, there remains a more risky option - to trade in the price range of 1.0960-1.1050, counting on stable "pullbacks and tides". However, in my opinion, geopolitics is not associated with any stability: a sharp increase in anti-risk sentiment (or vice versa – a sharp decrease in the degree of intensity) will sooner or later allow traders to push the pair out of the aforementioned range. That's just which way is an open question.
