EUR/USD bulls are hunting down the 1.11 area

• EUR/USD bulls attempting to recover with 1.1100 roadblock ahead. 
• Ukraine & Russian risks are in the driving seat as traders await key data events. 

EUR/USD is trading at 1.1093 after moving in on hourly resistance near the highs of the day at 1.1099. The euro has been enjoying a relief rally built on constructive peace talks between Ukraine and Russia which initially sent the price of oil lower. However, sceptics were in the room and that has weighed on risk sentiment again, oil prices and capped the euro's advance to daily resistance near 1.1140. 

The euro advanced when Russia said in talks in Istanbul on Tuesday that it would pull out its military operations around Ukraine's capital, Kyiv, and the north. Kyiv proposed adopting a neutral status, and not joining NATO. Kyiv requires that Moscow would not oppose Ukraine joining the European Union, Russia's lead negotiator Vladimir Medinsky said. Russia has previously opposed Ukrainian membership of the EU and especially of NATO. Medinsky said Russia's delegation would study and present the proposals to President Vladimir Putin.

Nevertheless, to prepare a peace agreement, Medinsky later told the TASS news agency, "we still have a long way to go". Meanwhile, the dollar, which had risen as much as 3.4% since Russia invaded Ukraine, lost its safe-haven appeal and declined 0.596% to 98.037, as traders looked to currencies deemed riskier, such as the euro. 

"A decision was made to radically, by a large margin, reduce military activity in the Kyiv and Chernihiv directions," Russian Deputy Defence Minister Alexander Fomin told reporters on Tuesday.

However, the United States warned the threat was not over. For instance, Fomin has made no mention of other areas that have seen heavy fighting, including Mariupol in the southeast, Sumy and Kharkiv in the east and Kherson and Mykolaiv in the south.

Russia has started moving very small numbers of troops away from positions around Kyiv in a move that is more of a repositioning than a retreat or a withdrawal from the war, the Pentagon said on Tuesday. "It does not mean that the threat to Kyiv is over," spokesman John Kirby told a news briefing.

Additionally, Ukraine's President Volodymyr Zelenskyy said only a concrete result from the talks can be trusted.

"We can say the signals we are receiving from the talks are positive but they do not drown out the explosions of Russian shells," he said.

British Prime Minister Boris Johnson said a ceasefire agreement in Ukraine will not be enough to lift British sanctions against Russia. US president, in the same vein, says that the US will keep sanctions.

Meanwhile, the economic calendar is starting to heat up. We have European inflation figures for March on Wednesday, with the composite release on Friday, the same day as the US will release its Nonfarm Payrolls numbers as a key event for the week. 

'Employment likely continued to advance in March following two strong reports averaging +580k in Jan and Feb,'' analysts at TD Securities said. 

''That said, we expect some of that boost to fizzle, though to a still firm job growth pace of +350k. Indeed, job gains should lead to a new drop in the unemployment rate to a post-COVID low of 3.7%. We also expect wage growth to slow to a still firm 0.3% MoM pace.''

As for eurozone inflation, the analysts expect headline HICP inflation to soar across the euro area in March, mostly due to a substantial surge in energy prices. ''We also look for a rise in non-energy industrial goods prices to boost euro area core inflation to a 28-year high of 3.2% (mkt: 3.1%). However, newly passed energy subsidies and price caps add some downside risk to our headline forecasts.''

EUR/USD H1 chart

The hourly chart shows that the price is attempting to break the hourly resistance.