• Euro climbs up against the greenback amidst cautious optimism on overcoming Russia – Ukraine crisis. 
• Recent jump in China’s covid which caused fresh lockdowns in multiple cities weighs on the market sentiment. 
• The U.S. Federal Reserve is widely expected to raise interest rates when it concludes a two-day policy meeting on Wednesday.

Euro trades high against the US dollar and is trading around intraday high of 1.0980 level during Tuesday Asian session.

The major currency’s latest move could be related to the US dollar’s pullback amid hopes of overcoming the Ukraine-Russia crisis by May. However, the quote largely ignores the firmer US Treasury yields, due to worsening covid woes in China.

China has reported more local symptomatic COVID-19 cases so far this year than in all of 2021, as the highly transmissible Omicron variant causes outbreaks from Shanghai to Shenzhen. The recent jump in China’s covid counts caused fresh lockdowns in multiple cities, recently near the capital Beijing. Reuters said “Mainland China reported 3,602 new coronavirus cases on March 14, the national health authority said on Tuesday, compared with 1,437 a day earlier.”

Russian and Ukrainian delegations held a fourth round of talks on Monday – by video link this time rather than in person in neighboring Belarus as in the past – but no new progress was announced and talks are expected to resume Today.

Meanwhile The Fed is widely expected to hike interest rates for the first time since the pandemic when its hands down its policy decision on Wednesday. Investors expect a 25 basis point rise at this meeting, according to the CME’s Fedwatch tool. However, pricing has risen to indicate a 70% chance of a larger 50 basis point hike at the May 2022 meeting, thanks to increasing concerns about inflation.The rate hike expectation from Fed could weigh on the EUR/USD buyers.  On the other hand, ECB’s Lagarde may reiterate her cautious optimism and defend the latest policy moves of the Quantitative Tightening (QT).

EUR/USD 4 Hour Chart:

Support: 1.0899 (S1), 1.0853 (S2), 1.0806 (S3).

Resistance: 1.0992 (R1), 1.1040 (R2), 1.1086 (R3).

Amidst all the catalysts creating cautious optimism for Euro, we expect a bullish trend for EUR/USD.