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  • EUR/USD extends the recovery and targets the 1.09 mark.
  • ECB’s F.Panetta, C.Lagarde will speak later in the session.
  • US New Home Sales, EIA report on crude supplies next across the pond.

The single currency is prolonging the upbeat tone so far this week and is now pushing EUR/USD to fresh weekly highs beyond 1.0890.

EUR/USD looks to ECB, coronavirus

EUR/USD is extending the march north to the vicinity of the 1.09 mark on Wednesday amidst renewed selling pressure in the greenback and unremitting concerns surrounding the Chinese COVID-19.

In fact, the selling mood appears to have gathered extra pace in the dollar in response to declining US yields and renewed speculations that the Fed could reduce its rates further in the next months in order to tackle the expected impact of the coronavirus on the economy.

Later in the European trading hours, ECB’s Board member F.Panetta will speak at an event in Frankfurt while President C.Lagarde also speaks in Wiesbaden.

Across the pond, January’s New Home Sales wil be in the limelight in the NA session seconded by the weekly report on US crude oil inventories by the EIA.

What to look for around EUR

EUR/USD keeps the bid bias unchanged so far this week on the back of upbeat data in Germany and fresh selling impetus around the buck. As usual, USD-dynamics are seen dictating the pair’s price action for the time being along with the broader risk appetite trends, where the COVID-19 remains in centre stage. On another front, the ECB is expected to finish its “strategic review” (announced at its January meeting) by year-end, leaving speculations of any change in the monetary policy before that time pretty flat. Further out, latest results from the German and EMU dockets continue to support the view that any attempt of recovery in the region remains elusive for the time being and is expected to keep weighing on the currency.

EUR/USD levels to watch

At the moment, the pair is gaining 0.10% at 1.0893 and faces the next up barrier at 1.0915 (21-day SMA) seconded by 1.0954 (38.2% Fibo of the 2020 drop) and finally 1.0981 (monthly low Nov.29 2019). On the downside, a break below 1.0777 (weekly/2020 low Feb.20) would target 1.0710 (monthly low Jan.5 2016) en route to 1.0569 (monthly low Apr.10 2017).