The euro remained weak against the US dollar, with EUR/USD holding below the 1.0400 level as traders awaited the latest Eurozone retail sales data for fresh direction. The pair struggled to gain traction as economic uncertainty and diverging monetary policy expectations continued to weigh on sentiment.
The US dollar maintained its strength, supported by steady Treasury yields and lingering expectations that the Federal Reserve will keep interest rates elevated for longer. Despite some signs of slowing US economic momentum, traders remained cautious about a potential shift in the Fed’s policy stance, limiting any upside for the euro.
Meanwhile, concerns over Eurozone economic weakness kept the single currency under pressure. Analysts expect a sluggish retail sales report, reflecting weak consumer spending amid persistent inflationary pressures. A disappointing print could reinforce expectations that the European Central Bank (ECB) may need to ease policy sooner than anticipated, further pressuring the euro.
Looking ahead, investors will closely watch the Eurozone retail sales release and upcoming US economic data, including inflation figures and Fed commentary, which could influence the pair’s next move. Any sign of resilience in US data may strengthen the dollar’s bullish bias, while a softer print could allow EUR/USD to stabilize.
For now, the euro remains vulnerable, with 1.0400 acting as a key resistance level. Unless the Eurozone retail sales data surprises to the upside, the pair may struggle to find near-term support, leaving it exposed to further downside risks.
