Zelensky said he was skeptical about the prospect of talks in Belarus
The euro dipped to fresh mid-2020 lows last week amid broad-based demand for the safe-haven greenback. The pair dipped to the 1.1100 figure before staging a bounce ahead of the weekend. Early on Monday, the common currency came back under pressure to attract renewed demand that took the prices back to the 1.1200 figure during the European hours.
However, it looks like the EURUSD pair could see fresh losses in the coming days as the situation surrounding the Russia-Ukraine conflict remains tense, with risk-off trends persisting, helping the dollar stay elevated across the market. According to the latest developments on this front, high-level talks between Kyiv and Moscow will take place on the Ukraine-Belarus border today. Investors hope that the talks will help ease tensions between the two countries. However, Ukrainian President Volodymyr Zelensky said he was skeptical about the prospect of talks in Belarus.
Of note, ECB rate hike bets have pared back amid the latest developments, which could add to the downside pressure surrounding the common currency down the road. Now, the timing of the first-rate hike has been pushed back to September from June.
Against this backdrop, the euro will hardly be able to regain 1.1200 and retarget the 20-DMA, currently at 1.1340. Instead, the pair may come back under pressure to challenge fresh long-term lows around 1.1000 this week if risk aversion continues to push high-yielding assets lower.
At this point, the immediate support is expected in the 1.1140-1.1120 region, followed by the 1.1100 mentioned zone. On the upside, EURUSD needs to overcome 1.1200 on a daily closing basis in order to retarget the mentioned moving average. However, downside risks continue to persist for the time being.