The EUR/USD pair edged lower, facing renewed selling pressure ahead of key German retail sales data, as investors remained cautious about the eurozone’s economic outlook. The pair dipped below 1.0400, with traders assessing the impact of weak demand and broader macroeconomic uncertainties.
Germany’s retail sales report, set for release soon, is expected to provide fresh insight into consumer spending trends, a critical component of economic growth. Recent sluggish data has raised concerns over the strength of the eurozone’s largest economy, adding to pressure on the euro’s performance against the U.S. dollar.
Meanwhile, the dollar remains firm, supported by hawkish Federal Reserve expectations. Investors anticipate that the Fed will maintain a restrictive monetary policy, reinforcing demand for the greenback and limiting any meaningful recovery in EUR/USD. U.S. economic resilience continues to drive sentiment, keeping the euro under pressure.
Global risk sentiment also plays a role, with market participants closely watching geopolitical developments and energy prices. Europe’s economic fragility, coupled with persistent inflation concerns, has weighed on the euro, while the U.S. remains a relatively attractive destination for capital flows.
The euro may find some temporary support if German retail data surprises to the upside, but overall, the pair remains vulnerable to further downside. A break below 1.0380 could accelerate losses, while any rebound would likely face resistance near 1.0450. For now, traders are keeping a cautious stance ahead of key data releases and central bank signals.
