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  • NZD/USD came under heavy bearish pressure during European session.
  • US Dollar Index edges higher toward 93.50 on Wednesday.
  • Trade Balance will be the only data featured in the US economic docket.

After spending the Asian session around 0.6700, the NZD/USD pair lost its traction and dropped to its lowest level in five days at 0.664. As of writing, the pair was down 0.6% on the day at 0.6667.

USD continues to capitalize on safe-haven flows

The intensifying flight to safety seems to be helping the greenback find demand and outperform its rivals on Wednesday. The surging number of coronavirus cases in Europe, fading hopes of a stimulus deal in the US continue to weigh on sentiment. The US Dollar Index, which closed a little above 93.00 on Tuesday, was last seen gaining 0.28% on the day at 93.35.

Reflecting the risk-averse market environment, major European equity indexes are down between 1.4% and 2.75%, while the S&P 500 futures are losing 1.3%, suggesting that Wall Street is poised to open deep in the negative territory.

Later in the day, September Trade Balance data will be featured in the US economic docket. However, investors are likely to ignore this report and remain focused on risk perception. In the early trading hours of the Asian session on Thursday, the ANZ will release the Business Confidence and Activity Outlook data for October.

Technical levels to watch for