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  • The pair is down smalls in the 1.1380 region.
  • The greenback looks to regain some composure after recent lows.
  • EMU Consumer Sentiment, Powell’s testimony next of significance.

After briefly testing tops just beyond 1.1400 the figure late on Tuesday, EUR/USD is now giving away part of those gains and has receded to the 1.1380/85 band, where sits the key 55-day SMA.

EUR/USD looks to data, Powell

Another dovish message from chief Powell at his testimony before the Senate Banking Panel on Tuesday fuelled a deeper pullback in the greenback and thus lifted spot to fresh 3-week tops in the 1.1400 neighbourhood.

In addition, the upbeat tone in the single currency and its risk-associated peers remains well supported by rising optimism on a probable trade deal between US and China.

Moving forward, ECB’s Private Loans figures and M3 Money Supply are due next seconded by several gauges of sentiment/confidence in the euro bloc. Across the pond, another testimony by Fed’s Powell should be no different from yesterday’s speech, while further releases in the calendar include Trade Balance, Factory Orders, Durable Goods Orders and Pending Home Sales.

What to look for around EUR

The ongoing rally in the shared currency has been almost exclusively on the back of USD-dynamics. In the meantime, EUR continues to look to developments from the US-China trade talks for near term direction, while the effervescence on the US-EU trade front appear somewhat relegated so far. Recent poor prints from the euro docket and a ‘reality check’ from the ECB minutes appear to have exacerbated concerns over the deterioration in the bloc’s fundamentals, pouring cold water over expectations of the start of the tightening cycle by the ECB in the next months and somehow undermining potential upside in spot.

EUR/USD levels to watch

At the moment, the pair is losing 0.08% at 1.1379 facing the next support at 1.1355 (21-day SMA) seconded by 1.1336 (10-day SMA) and finally 1.1275 (low Feb.19). On the upside, a breakout of 1.1402 (high Feb.26) would target 1.1442 (38.2% Fibo of the September-November drop) and then 1.1512 (200-day SMA).