After a choppy start to the session, European stocks came under intense selling pressure, with Russia-Ukraine tensions staying in the market focus, making investors worried. Over the weekend, US President Biden agreed to meet Russia’s President Vladimir Putin, bringing some hope for diplomatic efforts that could help avoid the invasion of Ukraine by Russia.
However, the news wasn’t enough to bring more sustained upbeat momentum to the markets, with the risk-off tone dominating again. As the earlier optimism has been washed out, the pan-European Stoxx 600 fell 1.6% in recent trading while US stock index futures turned negative after initial gains. Wall Street stock markets will be closed today for Presidents Day.
Generally, it doesn’t look like global investors will see some more certainty on the geopolitical front this week, with downside risks persisting in financial markets. As risk sentiment has deteriorated again, the safe-haven dollar trimmed early intraday losses across the market in recent deals.
EUR/USD, Gold - Technical View
EUR/USD was once again rejected from a slightly descending 100-DMA that caps the way towards the 1.1400 key upside target for the common currency.
Should the pressure intensify soon, the pair could threaten the 1.1300 figure again. On the other hand, the decline has been capped now by strong a Eurozone PMI report, which showed a solid service sector recovery in February.
Elsewhere, the safe-haven gold jumped to late-May highs around $1,908 earlier in the day before profit-taking took the precious metal back below the $1,900 figure, down to the $1,885 area. However, it looks like the bullion could see another bull run to fresh multi-month tops in the coming days despite the overbought signals, as geopolitics will likely continue to push traders to the safe-haven yellow metal.