EUR/USD consolidates daily losses above 1.1700

• EUR/USD remains on track to close the day modestly lower.
• US Dollar Index clings to daily gains above 93.00.
• Focus shifts to inflation data from Germany and the US.

After closing the previous five trading days in the negative territory, the EUR/USD pair extended its slide on Tuesday and touched its lowest level since late March at 1.1710. With the market action turning subdued in the late American session, the pair seems to have gone into a consolidation phase and was last seen losing 0.14% on a daily basis at 1.1720.

Investors await CPI data from Germany and US

Earlier in the day, the disappointing sentiment data from the euro area weighed on the shared currency. The ZEW Survey's Economic Sentiment Index declined to 42.7 for the eurozone from 61.2 and missed 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 USD strength forces EUR/USD to stay in the negative territory. Supported by a more-than-1% increase seen in the benchmark 10-year US Treasury bond yield, the US Dollar Index remains on track to register modest daily gains and close above 93.00.

On Wednesday, the Consumer Price Index (CPI) data from Germany and the US will be looked upon for fresh impetus. Investors expect the annual CPI to edge lower to 5.3% in July from 5.4% in June. A reading close to the market consensus is likely to help the USD preserve its strength amid Fed tapering expectations.

Technical levels to watch for