The Euro held steady against the US dollar and the Pound on Wednesday. The currency pair surged to a fresh monthly high of 1.1155 against the dollar. The recent strong rebound is supported by the latest comments from Russian officials. Russia saying it will drastically reduce military activity near the Ukrainian capital Kyiv and the northern city of Chernihiv. The USD suffered big losses against the euro this week but the seemingly inevitable divergence in US and European monetary policy was expected to continue supporting the dollar in the longer term.

EQUITIES

European shares opened higher on Wednesday as investors welcomed reports of some progress in ceasefire talks between Russia and Ukraine. On the other hand, Russian negotiator Vladimir Medinsky was quoted saying that there have been enough developments to hold a meeting between President Vladimir Putin and his Ukrainian counterpart Volodymyr Zelenskyy

OIL

Crude oil futures recovered from the previous session's losses boosted by the latest API inventory data. On Tuesday, the oil prices dropped to a fresh week low bolstered by China’s lockdown of the Shanghai province and the progress in peace talks between Russia and Ukraine.

CURRENCIES

In the currency market, the US dollar index plunged to a fresh weekly low. The British pound remains under pressure against the Euro after the comments from BOE Governor Andrew Bailey. He said that the living standards of most Britons will decline substantially because of the rising energy crisis. “The shock from energy prices this year will be larger than every single year in the 1970s,” Bailey said.

GOLD

The safe-haven rebounded back to above $1920 supported by the weaker US dollar. However, the overall momentum remains bearish as the improvement in the risk appetite of the investors is shifting the focus from safe-haven assets.

Economic Outlook

On the data front, the Labor Department reported the January JOLTs report. Job openings totaled 11.26 million in January, more than the 10.9 million estimated. Meanwhile, the US consumer confidence index rose to 107.2, up from February's initial reading of 110.5.

Moving ahead today, the important events to watch:

US – ADP employment report: GMT – 12.15

US –GDP: GMT – 12.30

Coronavirus update:

Worldwide, more than 480 million people have been confirmed infected and more than 6.11 million have died. The United States has confirmed over 79.8 million cases and has had more than 975,000 deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

EURUSD: The currency pair holding the early session gains. If the bullish momentum continues the next upside levels to watch are 1.1180 and 1.1230. On the downside, the immediate support is around 1.1100.

The important levels to watch for today: Support- 1.1100 and 1.1070 Resistance- 1.1180 and 1.1210.

GOLD: The yellow metal retreats after it failed to break above the $1930 resistance area. Moving ahead to the North American session, the USD traders should closely monitor the release of U.S. ADP and GDP data.

The important levels to watch for today: Support- 1912 and 1890 Resistance- 1930 and 1945.

Quote of the day - "The longer you’re not taking action the more money you’re losing." – Carrie Wilkerson.