EUR/USD looks to 1.1400 on diplomatic talks over Ukraine

• EUR/USD looks to break higher from 1.1357-1.1371 on the  Blinkin-Lavrov meeting next week.
• The DXY is likely to auction lower as risk sentiment in the market improves.
• Easing fears over an imminent Russian invasion of Ukraine underpin Treasury yields.

The EUR/USD pair extends the bounce from Thursday's low of 1.1322, as investors cheer the meeting between US Secretary Antony Blinken and Russian Foreign Minister Sergei Lavrov. The former has accepted the invitation for meeting late next week, with a stipulation that there is no further Russian invasion of Ukraine, said US State Department.

The positive developments over the Russia-Ukraine tussle have supported the Asian markets, S&P500 futures and risk-sensitive currencies but EUR/USD is gathering strange to break out from a range of 1.1357-1.1371.

Meanwhile, the US dollar index (DXY) has failed to surpass 96.00 several times from Thursday, which is indicating that the DXY may auction lower, backed by fading risk-off trades and liquidity channelization towards risk-sensitive currencies.

The 10-year US Treasury yields have turned positive around 0.6% from Thursday’s close and are indicating that the market sentiment is turning favorable.

It is highly likely that investors will accommodate their positions on the basis of geopolitical headlines but investors will also keep Friday’s Consumer Confidence data by the European Commission under the radar. Adding to that, the speech from European Central Bank (ECB) Frank Elderson on Friday will also provide some insights about the stance of the ECB that it will dictate in its March’s monetary policy committee (MPC) meeting. Meanwhile, a slew of Fedspeak will also hog the limelight.