EUR/USD goes into consolidation above 1.1750 after dropping to 20-day lows
- EUR/USD remains on track to close the day deep in the red.
- US Dollar Index clings to strong daily gains on Thursday.
- Focus shifts to eurozone Consumer Price Index data.
The EUR/USD pair broke below its horizontal trading range on Thursday and dropped to its lowest level since late August at 1.1751 before going into a consolidation phase. As of writing, the pair was down 0.45% on the day at 1.1763.
DXY advances toward 93.00
The broad-based USD strength on the back of robust macroeconomic data releases weighed heavily on EUR/USD in the second half of the day.
The data published by the US Census Bureau revealed on Thursday that Retail Sales increased by 0.7% in August. With this reading coming in much better than the market expectation for a decline of 0.8%, the greenback continued to outperform its major rivals. Moreover, the Philly Fed Manufacturing Index improved to 30.7 in September from 19.4 in August. On a negative note, the Initial Jobless Claims edged higher to 332,000 in the week ending September 11 from 312,000. Currently, the US Dollar Index is rising 0.47% at 92.92.
In the meantime, the benchmark 10-year US Treasury bond yield is up nearly 2%, providing an additional boost to the USD.
On Friday, the Consumer Price Index (CPI) data from the euro area will be looked upon for fresh impetus. Investors expect the CPI to stay unchanged at 3% on a yearly basis in August. Several European Central Bank (ECB) policymakers said earlier in the week that the rise in inflation was expected to be temporary. Nevertheless, the market reaction is likely to be muted to this data unless there is a large divergence from market consensus.
Technical levels to watch for