EUR/USD recovers modestly after dropping to fresh six-day lows near 1.1750

• EUR/USD is consolidating daily losses in American session.
• ECB President Lagarde's dovish comments weighed on EUR.
• US Dollar Index remains on track to close above 93.00.

The EUR/USD pair spent the first half of the day moving sideways above 1.1800 but lost its traction ahead of the American session. With European Central Bank (ECB) President Christine Lagarde's comments on the policy outlook putting additional weight on the shared currency, EUR/USD dropped to a six-day low of 1.1746. As of writing, the pair was down 0.4% on the day at 1.1765.

Lagarde reminds markets of ECB action in December

While delivering her opening remarks at the ECB Forum on Central Banking, Lagarde noted that the Pandemic Emergency Purchase Program and Targeted Longer-Term Refinancing Operations (TLTROs) have proven to be effective tools. "They are, therefore, likely to remain the main tools for adjusting our monetary policy," Lagarde added.

Commenting on the economic outlook, Lagarde said that even if the second wave of the coronavirus proves to be less intense than the first, it poses no less danger to the economy.

On the other hand, despite a lack of fundamental drivers, the greenback continues to gather strength against its rivals with the US Dollar Index (DXY) looking to close above 93.00 for the first time in a week. 

On Thursday, the Industrial Production report for the euro area, the Consumer Price Index (CPI) data from Germany and the US will be looked upon for fresh catalysts. Additionally, the ECB will release its Economic Bulletin. 

Technical levels to watch for