Risk tones are faring more optimistic as we get into European morning trade, following news of a Blinken-Lavrov meeting next week. The aussie and kiwi was notably resilient yesterday in spite of all the negativity and stocks selloff, and are both pushing higher today as well.
AUD/JPY continues to hold at its key daily moving averages and is looking to contest the daily trendline resistance @ 83.13 on the day. Meanwhile, NZD/USD is contesting a push above 0.6700 again with NZD/JPY is closing in on the highs for the week near 77.40.
I reckon markets are getting more accustomed to the war of words between Russia and Ukraine but that doesn't mean risk trades - particularly equities - are going to get the all clear. There's still the whole inflation and central bank tightening narrative that stocks have to go up against in the months ahead.
But for now, it looks like we may see some reprieve ahead of the long weekend but be wary that sentiment can quite easily turn on its head in this kind of environment.
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