EUR/USD struggles to gain ground around 1.0740, investors await Eurozone data, US CPI

• EUR/USD attracts some sellers around 1.0745 amid the cautious mood.
• European Central Bank (ECB) expects inflation in the Eurozone to remain over 3% next year, supporting another rate hike on Thursday.
• Investors await the US Consumer Price Index (CPI) ahead of the ECB interest rate decision.

The EUR/USD pair struggles to gain and hold below the mid-1.0700s during the early European session on Wednesday. Markets turn cautious ahead of the key US inflation data due later in the North American session. The major pair currently trades near 1.0745, down 0.07% on the day.

According to Reuters, the European Central Bank (ECB) anticipates inflation in the Eurozone to remain over 3% next year, supporting the argument for a tenth straight interest rate hike on Thursday. Market participant's expectations on interest rates from ECB have been divided, with approximately 40% of investors anticipating a rate hike at its meeting on Thursday. Nonetheless, if the unconfirmed ECB disclosure proves accurate, the ECB could very well announce another rate rise this week. This, in turn, might boost the Euro against the Greenback and act as a headwind for the EUR/USD pair.

Across the pond, the upside of EUR/USD might be limited as market players prefer to wait on the sidelines ahead of the US Consumer Price Index (CPI) data on Wednesday.  The annual rate is expected to rise from 3.2% to 3.6%, while the core figure is expected to drop from 4.7% to 4.4%. The data could trigger volatility in the pair and influence an expectation of the Federal Reserve's monetary policy.

Furthermore, the US Dollar (USD) may benefit from the higher for longer interest rate narrative in the US. Investors expect the Federal Reserve (Fed) to maintain the interest rate unchanged in September at 5.25%-5.50%, with a 93% chance. Meanwhile, the market have priced in 40.8% the odds of a rate hike in the November meeting, according to the CME Fedwatch Tool,

Later in the day, investors will closely watch Eurozone Industrial Production and the highly anticipated US Consumer Price Index (CPI) for August for fresh impetus. On Thursday, the attention will shift to the ECB's monetary policy and the US Retail Sales. The event could provide the EUR/USD pair with a clear direction.