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  • EUR/USD quickly drops to the 1.1750 region on Wednesday.
  • Risk aversion picks up pace and supports the dollar.
  • France’s Consumer Confidence ticked lower to 94 in October.

The selling bias in the single currency gathers extra pace and drags EUR/USD to fresh multi-day lows in the mid-1.1700s on Wednesday.

EUR/USD looks offered ahead of the ECB

EUR/USD loses ground for the third consecutive session and at the same time breaks below the multi-session consolidate theme above the 1.18 mark observed in the last couple of weeks.

The pick-up in the risk aversion continues to lend support to the greenback so far this week amidst rising fears of the impact of the second wave of the coronavirus pandemic on the economy, all in light of renewed and increasing restriction measures across Europe.

The euro also stays under pressure ahead of the key ECB event on Thursday amidst rising speculations of the dovish message from the central bank.

Earlier in the euro docket, France’s Consumer Confidence ticked a tad lower to 94 for the month of October, although it came in above estimates. In Germany, Import Prices surprised to the upside and rose 0.3% MoM in September and contracted 4.3% from a year earlier.

Across the pond, weekly MBA’s Mortgage Applications is due seconded by advanced Trade Balance figures and the EIA’s weekly report on crude oil stockpiles.

What to look for around EUR

EUR/USD loses momentum and retests the 1.1750 region against the backdrop of a persistent inflows into the safe haven universe. The outlook on EUR/USD remains positive, 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 (despite momentum appears somewhat mitigated in several regions), the so far cautious stance from the ECB and the solid position of the EMU’s current account. In addition, the probable “blue wave” following the US elections is deemed as a negative driver for the greenback and carries the potential to lend extra legs to the pair in the longer run.

EUR/USD levels to watch

At the moment, the pair is losing 0.36% at 1.1752 and faces the next support at 1.1688 (monthly low Oct.15) followed by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9). On the other hand, a breakout of 1.1880 (monthly high Oct.21) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18).