EUR/USD steadies near 1.1000 after spiking to 1.1015 on dismal US data

The EUR/USD pair registered daily losses on Monday and closed below the 1.10 handle as the shared currency came under pressure after the disappointing Purchasing Managers Index data from the euro area and Germany. On Tuesday, however, the pair capitalized on the broad-based USD weakness during the American trading hours and recovered a small portion of its losses. Following a spike to 1.1015, the pair started to consolidate its gains and was last seen trading at 1.1000, adding 0.1% on a daily basis.

Earlier today, German Ifo Expectations Index in September fell to 90.8 from 91.3 and missed the market expectation of 91.8. On a positive, note, the Current Assessment Index and the Business Climate Index improved to 98.5 and 94.6, respectively, to help the shared currency stay resilient against its rivals.

Commenting on the data, “The headline and current conditions both coming in better than consensus, but expectations falling to a new post-financial crisis low of 90.8," said TD Securities analysts.

"This leaves it more in line with yesterday's disappointing PMI data than the upbeat tone from the ZEW's expectations component last week.”

Consumer confidence weakens in the US

In the second half of the day, the Conference Board's Consumer Confidence Index in the US slumped to 125.1 in September and missed the market expectation of 133.5 by a wide margin. The US Dollar Index, which spent the majority of the day in a tight channel near 98.60, lost its traction on the dismal confidence data and dropped to 98.50 area. Moreover, the Richmond Fed's Manufacturing Index plummeted to -9 in September from 1 in August but came in slightly better than analysts' estimate of -11.

The economic calendar won't be featuring any significant macroeconomic data releases from the euro area or the United States on Wednesday and the subdued trading action is likely to continue.

Technical levels to watch for