Euro trades flat despite soft European inflation

EUR/USD treads water despite earlier US Dollar weakness supporting the pair.
Softer German and French inflation data may reduce pressure on the ECB to maintain an aggressively restrictive stance.
Trump’s warning that the Iran ceasefire is “over” is lifting geopolitical uncertainty and limiting the Euro’s gains.

Agustin Wazne FXStreet

EUR/USD trades in a muted fashion near the 1.1430 area on Friday, as a weaker US Dollar (USD) helps the pair hold onto modest Thursday gains. That was true even after inflation data from Germany and France showed limited price pressure.

Germany’s Consumer Price Index (CPI) fell 0.3% MoM in June, while the annual rate remained unchanged at 2.3%. The Harmonized Index of Consumer Prices (HICP) declined 0.2% MoM and rose 2.4% YoY. In France, the EU-harmonized CPI fell 0.3% on the month and increased 2.0% from a year earlier.

The readings suggest that inflation in two of the Eurozone’s largest economies remains relatively contained. This could reduce the need for the European Central Bank (ECB) to maintain an aggressively restrictive policy stance, limiting the Euro’s upside.

Meanwhile, geopolitical uncertainty remains in focus. United States (US) President Donald Trump said on Truth Social that Iran had requested further negotiations and that Washington had agreed to continue talks. However, Trump also warned that the ceasefire was “over,” raising concerns that hostilities could intensify despite ongoing diplomatic contact.

Renewed tensions between the US and Iran may support safe-haven demand for the Greenback and keep EUR/USD gains limited. Still, the pair holds onto meager gains from Wednesday and Thursday as broader US Dollar weakness offsets the impact of softer European inflation data.

Short-term technical analysis:

On the 4-hour chart, EUR/USD trades at 1.1433, holding above the 20-period Simple Moving Average (SMA) at 1.1425 and the 100-period SMA at 1.1415, which provide near-term trend support but leave the pair capped by a dense band of overhead levels. Price is already testing the lower edge of this cap, with nearby horizontal resistances at 1.1442, 1.1450 and 1.1461 limiting upside attempts, while the Relative Strength Index (RSI) around 52 hints at steady but not aggressive bullish momentum, reinforcing a mildly capped tone as long as these barriers remain intact.

On the downside, initial support is seen at the horizontal floor at 1.1431, followed by the 20-period SMA at 1.1425 and the 100-period SMA at 1.1415, which together form a compact demand zone that would need to give way to signal a deeper pullback. On the topside, immediate resistance comes first at 1.1442, ahead of 1.1450 and then 1.1461, and only a sustained break above this ascending cluster would open the door for a more constructive recovery in the pair.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold looks to regain $4,200 amid pre-US CPI repositioning

Gold is stretching higher toward $4,200 on Friday, extending recovery from two-month lows. US Dollar eases in tandem with Oil prices and Treasury yields, awaiting US sentiment data. The tide seems to be turning in favor of Gold, but the daily RSI is still bearish.

Ethereum drops below $2,500 as rising Treasury yields trigger selling pressure

Ethereum (ETH) fell below $2,500 on Thursday, down nearly 4% and extending losses for a third consecutive day. The decline follows rising Oil prices and US Treasury yields over the past few days. The 10Y Note Yield reached a 24-year high at 5.35%, and the 30Y Note Yield climbed above 5.70% earlier on the day, sparking major distributions in the crypto market.

The inflation illusion: How government formulas shape the data

Every month, the government releases a barrage of economic statistics. Employment, inflation, consumer spending, economic growth, and countless other measurements are presented as objective facts that policymakers, investors, and the public can use to understand the economy. But what happens when the methodology used to produce those numbers changes?

The UK 30-year gilt just hit a 1998 high. Is that good or bad for the British Pound?

The yield on the UK's 30-year government bond, or gilt, went through 6% on October 1 for the first time since early 1998, and on Monday the Pound was at its strongest against the Euro since June 2025. The gilt market's 28-year high is mostly someone else's. Since early May, the 30-year gilt yield has risen about 0.15 of a percentage point and the US 30-year about 0.7.