EUR/USD Gains Limited Despite Ukraine Peace Talks Progress

EUR/USD has seen modest gains as positive developments in Ukraine peace negotiations fail to provide meaningful support to the euro, which remains fundamentally undervalued against the dollar. The pair trades marginally higher, but the relief rally appears constrained by persistent interest rate differentials and concerns about European economic growth. While reduced geopolitical tensions typically benefit risk-sensitive currencies like the euro, the market's reaction has been muted, suggesting traders remain focused on monetary policy divergence between the ECB and Fed. The euro's wide undervaluation versus the greenback, estimated by some analysts at 10-15%, reflects structural headwinds including energy concerns and growth differentials. Technical resistance around 1.0550-1.0600 continues to cap gains, while support holds near 1.0450. Without a fundamental shift in the rate outlook or significant de-escalation in Eastern Europe, the euro's recovery potential remains limited against the dominant dollar trend.