Progress in Russia-Ukraine peace talks remains underpriced in the Euro (EUR), with signals from Moscow and ongoing US diplomatic efforts offering a potential medium-term boost while the USD stays soft. EUR/USD trades near 1.1610 with bullish momentum, eyeing resistance at 1.1640 and 1.1720, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Russia–Ukraine diplomacy may add fresh EUR tailwind

"Recent geopolitical development is worth noting. Hopes of breakthrough in Russia-Ukraine peace talks is likely not adequately priced into EUR at this point. Putin said that the draft discussed in Geneva could form the basis of a future deal with Ukraine while US peace envoy Steve Witkoff is visiting Moscow this week."

Though it may be early at this point but a potential resolution at some stage can be another driver lending a boost to EUR while USD stays soft. EURlast seen at 1.1610 levels. Bullish momentum on daily chart intact while RSI rose. Mild upside risks. Resistance at 1.1640 levels (23.6% fibo retracement of Mar low to Sep high), 1.1720 levels. Support at 1.1570 (21 DMA), 1.15 levels.