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  • EUR/USD remains under pressure near the 1.18 mark.
  • German Economic Sentiment eased to 56.1 in October.
  • US inflation figures next of relevance across the ocean.

The offered stance around the single currency remains well in place and drags EUR/USD to the 1.1800 region on turnaround Tuesday.

EUR/USD now looks to EU Summit

EUR/USD extends the leg lower after the recent bull run failed to extend further north of the 1.1830 region (Friday), all against the backdrop of a generalized cautious trade and a mild pick up in the risk aversion.

In fact, sellers have returned to the risk complex as of late, as discussions over an extra US fiscal stimulus package appear stalled, while news that Johnson & Johnson (NYSE: JNJ) has paused its study of the COVID-19 vaccine candidate also weighs on the riskier assets.

In the euro docket, the German Economic Sentiment tracked by the ZEW survey receded to 56.1 for the month of October, coming in short of expectations at the same time.

Across the Atlantic, the salient event will be the publication of the September’s inflation figures gauged by the CPI along with the NFIB Index and the IBD/TIPP Index.

What to look for around EUR

EUR/USD has finally surpassed the 1.1800 yardstick although the up move run out of steam in the 1.1830 region, sparking the current leg lower. The pair’s outlook still remains constructive, however, and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (which have been in turn supporting further the view of a strong economic recovery after the slump in the activity during the spring), the so far cautious stance from the ECB and the solid position of the EMU’s current account.

EUR/USD levels to watch

At the moment, the pair is losing 0.15% at 1.1793 and faces immediate contention at 1.1709 (38.2% Fibo of the 2017-2018 rally) seconded by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9). On the upside, a breakout of 1.1830 (monthly high Oct.9) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18).