U.S. President Joe Biden and Russian President Vladimir Putin have accepted in principle a French proposal for a diplomatic summit, France said, potentially offering fresh hope for a peaceful solution to pull Russia and Ukraine back from the brink of war.
The meeting, proposed by French President Emmanuel Macron, would occur only if Russia doesn’t invade Ukraine, U.S. officials said Sunday. The discussion would focus on security and strategic stability in Europe, followed by a second summit with relevant stakeholders, the French presidential office said in a statement. There was no immediate confirmation from the Kremlin. Moscow continues to deny it plans to invade Ukraine and says it is already pulling troops back from areas near the border, though the U.S. has disputed that.
With this in mind, there could be a large de-escalation play setting up in the market. We have been watching the EURUSD closely for a long trade and feel it fits the bill. The DXY may also have completed a large corrective rally and is possibly in the early stages of a decline.
DXY Weekly Chart
The weekly charts are showing a cross over on the MACD which tends to occur prior to a reversal. The DXY has possibly completed the ABC corrective rally and should breakdown from the rising channel structure.
EURUSD Weekly Chart
Again, the MACD has crossed over to the upside which tends to occur prior to a reversal. Furthermore, the EURUSD has retested a broken negative trend line. This is possibly the start of a new bullish trend for the EURUSD.
EURUSD 1 Hour Chart
Trade Setup: BUY EURUSD, current price 1.1364, stop loss 1.1280 and take profit left open, we will be looking to add multiple positions on this trade if it moves in the correct direction.
Stop loss: 84 pips