Talks of a ceasefire spark US Dollar selloff

Headlines were abundant this morning as Ukrainian and Russian delegates left their first face to face round of talks in nearly two weeks. After entering the meetings Zelensky hoping for a ceasefire, top Russian negotiator Medinsky said that the talks between the 2 sides were constructive and Russia agreed to scale back military operations near Kyiv. Zelensky was willing to say that Ukraine would go to neutral status, without foreign military bases, if a security guarantee is put into place. Possible backers of the security guarantors could be Turkey, Israel, Canada, and Poland according to sources. Ukraine is saying that this is enough of a compromise for a Zelensky and Putin meeting, however this has not been confirmed by either side.

As result of the positive news out of the Russia/Ukraine war, the US Dollar index (DXY) pulled back dramatically. On a 60-minute timeframe, the DXY had been trying to break above 99.30 for days but failed to close above it. With today’s selloff, the US Dollar Index pulled back aggressively and broke below the upward sloping trendline from March 17^th.

Source: Tradingview, Stone X

However, as dramatic as the move was on a 60-minute timeframe (over 100 pips), the DXY has been trading in a range between 97.71 and 99.37 since March 4^th. Price must break either side of that range for the price move to be meaningful. If the DXY breaks below 97.71, the next support level is the bottom trendline of the upward sloping channel that the pair has been in since May 2021, near 96.60, then horizontal support at 96.23. If price reverses and shrugs off this move lower, resistance above 99.37 isn’t until the highs from April 2020 near 100.87.

Source: Tradingview, Stone X

As the Euro makes up 57.6% of the US Dollar Index, one could expect that EUR/USD would move opposite the DXY. On the 60-minute timeframe, EUR/USD broke above the downward sloping trendline dating back to February 25^th and is attempting to take out horizontal resistance at 1.1143, the highs of the range dating back to March 2^nd.

Source: Tradingview, Stone X

On a daily timeframe, notice that the top, downward sloping trendline of the channel crosses just above the horizontal resistance at 1.1165. Above there is horizontal resistance at 1.1280 and again near 1.1500. Support is at the lows from Monday at 1.0945, then the low from March 7^th at 1.0813.

Source: Tradingview, Stone X

With the positive headlines regarding the Russia/Ukraine conflict, the DXY has been selling off and EUR/USD has been bid. However, keep a close eye on the headlines. Any sign of negative news and the currency pairs can reverse quickly.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.