EUR / USD consolidates daily losses above 1.1700

• EUR / USD is still on track to close the day modestly lower.
• The US Dollar Index clings to daily gains above 93.00.
• The focus is on inflation data for Germany and the United States.

After closing the previous five trading days in negative territory, the EUR / USD extended its slide on Tuesday and hit its lowest level since the end of March at 1.1710. With market action being subdued at the end of the US session, the pair appears to have entered a consolidation phase and was last seen shedding 0.14% on the day at 1.1720.

Investors expect CPI data from Germany and the US.

Earlier in the day, disappointing sentiment data from the euro zone weighed on the shared currency. The ZEW survey economic sentiment index fell to 42.7 for the eurozone from 61.2 and disappointed the market expectation of 72 by a wide margin. Similarly, the Economic Sentiment Index dropped to 40.4 from 63.3 in July.

On the other hand, the unabated strength of the US dollar forces the EUR / USD to remain in negative territory. Backed by a more than 1% rise seen in the benchmark 10-year US Treasury yield, the US dollar index remains on track to post modest daily gains and close above 93.00.

On Wednesday, data from the Consumer Price Index (CPI) from Germany and the United States will be seen as a new boost. Investors expect the annual CPI to decline to 5.3% in July from 5.4% in June. A reading close to market consensus is likely to help the USD preserve its strength amid the Fed’s downsizing expectations.

Technical levels to take into account