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  • EUR/USD extends the bearish note below 1.0900.
  • Prospects of recession in the euro area weigh on euro.
  • US weekly claims in the spotlight once again.

The selling bias in the European currency remains well and sound for another session on Thursday, with EUR/USD attempting a consolidative theme below the 1.0900 mark.

EUR/USD weak on COVID-19 fallout, looks to data

EUR/USD is prolonging the weekly downside for the second session in a row on Thursday, always on the back of the moderate pick-up in the demand for the greenback, a firm rirsk-off sentiment and speculations that the euro area is facing increasing risks of slipping into a recession in the next months,

In fact, growth prospects in the euro region continue to deteriorate, as the impact of the coronavirus on the economy keeps hurting the sentiment and confidence among market participants despite many countries are already attempting to kickstart some key sectors in the economy.

Also maintaining the single currency under pressure, the prevailing risk aversion has been lending renewed support to the greenback, considered the safe haven of choice for the time being.

Earlier in the session, German final March CPI came in in line with the preliminary readings, showing consumer prices rose at a monthly 0.1% and 1.4% from a year earlier. Further data noted the Industrial Production in the broader Euroland contracted less than expected during February: 0.1% inter-month and 1.9% on a yearly basis.

In the US data space, the weekly Initial Claims will grab all the attention seconded by housing data and the Philly Fed index.

What to look for around EUR

The euro is extending the selling mood so far this week, always with the COVID-19 and the economic depression that will surely emerge in the next months in the limelight. On the more macro view, the single currency is expected to come under pressure in the next periods in light of the forecasted contraction in the economy of the region in the first half of the year, relegating hopes of a strong recovery to Q3 and/or Q4. On the positive side, the recent Eurogroup agreement helped to alleviate some political effervescence among some state members, keeping retracements in the currency as shallow for the time being.

EUR/USD levels to watch

At the moment, the pair is losing 0.43% at 1.0862 and faces the next support at 1.0856 (weekly low Apr.15) followed by 1.0814 (78.6% Fibo of the 2017-2018 rally) and finally 1.0768 (monthly low Apr.6). On the other hand, a breakout of 1.0990 (weekly/monthly high Apr.15) would target 1.1054 (200-day SMA) en route to 1.1147 (weekly high Mar.27).