EUR/USD approaches 1.1400 as risk-on mood weighs on USD, Russia-Ukraine news, PMIs eyed

• EUR/USD refreshes intraday high to portray the first positive daily performance in three.
• Market sentiment improves on Biden-Putin summit news, Blinken-Lavrov on the cards as well.
• Hawkish ECB rhetoric contrasts recently easy Fedspeak to underpin further upside of the pair.
• Preliminary PMIs for February, Fedspeak decorates calendar but risk catalysts are more important for near-term directions.

EUR/USD takes the bids to renew intraday high near 1.1365, up 0.35% intraday as it snaps two-day downtrend during the late Asian session on Monday. The major currency pair not only dropped during the last two days but also portrayed a fortnight-long south-run before the latest recovery, mainly due to the improvement in the risk appetite.

Global markets began the trading week on a back foot as weekend news marked an explosion was heard in the center of the rebel-held city of Donetsk in eastern Ukraine. However, the sentiment quickly improved after AFP quoted French President Emanuel Macron who proposed a summit including US President Joe Biden and his Russian counterpart Vladimir Putin. The news also mentioned that both the parties have accepted the “principle” of a summit. Following the news, the White House said, “President Biden accepted in principle a meeting with President Putin following that engagement, again, if an invasion hasn’t happened.”

While portraying the risk-on mood, the S&P 500 Futures reverse the early Asian loss of around 0.50% while the US Dollar Index (DXY) remains pressured around 95.80 by the press time.

In addition to the firmer sentiment, recently softer Fedspeak also weighs on the USD and helps the EUR/USD to consolidate the latest losses. That said, Federal Reserve Bank of Chicago President and FOMC member Charles Evans said on Friday that the current Fed policy had been "wrong-footed" in the face of high inflation, but may not need to become restrictive. On the other hand, New York Federal Reserve Bank President John Williams and the No. 2 official on the Fed’s policy-setting panel mentioned, "I don’t see any compelling argument to taking a big step at the beginning."

On the same line, Bloomberg quoted European Central Bank (ECB) sources to mention, “Policymakers are edging towards a rate hike before the end of 2022 to stem more persistent than expected inflationary pressures and a stronger inflation outlook.”

Looking forward, EUR/USD traders will pay close attention to the Russia-Ukraine developments as the Biden-Putin summit may de-escalate market fears of a war between Moscow and Kyiv. The meeting between US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov is also important for fresh impulse.

On an intraday basis, preliminary readings of February month’s PMI figures for Germany, the Eurozone and the US will be crucial. Also important will be a speech from Fed Governor Michelle W. "Miki" Bowman".

Technical analysis

Although steady RSI suggests short-term EUR/USD grind between the 100-DMA and 12-day-old support, respectively around 1.1425 and 1.1290, recently bearish MACD signals keep sellers hopeful.