Can we see the bulls above 1.3 dollars?
In the last hours of US markets on Wednesday, we could see some hopes in markets on the Russia-Ukraine second round of peace talk, especially after the FED Chair Jerome Powell signals about a 25bp rate hike in March.
Powell in his testimony to the US House of Representatives Financial Services Committee, talked about the possible effects of current geopolitical tensions in Ukraine and supported just a 25 basis point rate hike in March and played down the possibility of 50 basis point rate hike, which market participants used to count on that. For now, market participants now counting on just a 5% probability of a 50 basis point rate hike in the March meeting and a 95% probability of a 25 basis point rate hike.
It means that stock markets can rely on more support for a bit longer time, which so directly affected the markets with a 2% gain on average in the leading US indices. At the same time, we could see the US dollar also, which earlier saw a significant increase by war concerns in Ukraine, also lost almost 0.50% of its earlier gain above 97.82.
At the same time, the second round of peace talks eased the market risk. USVIX currently moving under 29, while earlier it was seen above 31.40. Less market risk, especially less risk in Europe means that we can expect to have a bit stronger Euro.
From the technical point of view, as we can see in the bellow H1 chart of EURUSD, it has some reversal signal, however, bulls need above 1.1150 area to be able to confirm themselves. Breathing above this level, can put the 1.12 and then 1.1320 in the radars.