{"id":23810,"date":"2025-05-30T08:55:33","date_gmt":"2025-05-30T08:55:33","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=23810"},"modified":"2025-05-30T08:55:33","modified_gmt":"2025-05-30T08:55:33","slug":"euro-slips-as-weak-data-weighs-on-ecb-rate-path","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/euro-slips-as-weak-data-weighs-on-ecb-rate-path\/","title":{"rendered":"Euro Slips as Weak Data Weighs on ECB Rate Path"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image_fx-80-1024x559.png\" alt=\"\" class=\"wp-image-20946\"\/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>EURUSD retreats from session high of <strong>1.13900<\/strong> to settle near <strong>1.13365<\/strong>, shedding 0.25% on the day.<\/li>\n\n\n\n<li>German retail sales missed estimates while French and Spanish inflation cooled \u2014 reinforcing rate-cut expectations for next week\u2019s ECB meeting.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<p>The euro weakened slightly on Friday, trimming earlier gains as European data painted a fragile picture of the region\u2019s recovery and strengthened the case for further easing by the European Central Bank.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">ECB President Lagarde suggested that the US trade uncertainty could create opportunities for Europe. Economist Carsten Brzeski of ING told Reuters Europe should perhaps be careful what it wishes for, since a stronger euro could weigh heavily on the continent&#39;s exporters <a href=\"https:\/\/t.co\/VEGlphaUDu\">pic.twitter.com\/VEGlphaUDu<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1927690063024136251?ref_src=twsrc%5Etfw\">May 28, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>In Germany, retail sales contracted <strong><a href=\"https:\/\/www.reuters.com\/business\/retail-consumer\/german-retail-sales-fall-more-than-expected-april-2025-05-30\/\" target=\"_blank\" rel=\"noopener\" title=\"\">1.1% month-on-month in April<\/a><\/strong>, marking the first monthly decline since December and falling well short of expectations for a <strong>0.2% rise<\/strong>. The data added to concerns that Europe\u2019s largest economy is struggling to sustain household consumption in the face of rising borrowing costs and softening external demand.<\/p>\n\n\n\n<p>Meanwhile, inflation figures released across the bloc offered a dovish counterweight. <strong>Spain\u2019s CPI<\/strong> eased to <strong>1.9%<\/strong>, down from 2.2% in March and now below the ECB\u2019s 2% target. <strong>France\u2019s CPI<\/strong> slowed dramatically to <strong>0.7%<\/strong>, its lowest since <strong>February 2021<\/strong>, and well under consensus estimates of <strong>0.9%<\/strong>.<\/p>\n\n\n\n<p>These soft inflation reads have all but confirmed that the <strong><a href=\"https:\/\/t.co\/p8gXDz7MMW\" target=\"_blank\" rel=\"noopener\" title=\"\">ECB will proceed with a 25 basis point rate cut<\/a><\/strong> at next week\u2019s policy meeting. With core inflation cooling and domestic demand stalling, policymakers may have room to cut without reigniting price pressures \u2014 especially as the Fed holds rates steady for longer.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Tariff Tensions Shift Tone<\/h2>\n\n\n\n<p>The euro&#8217;s weakness was compounded by a rebound in the dollar, driven in part by renewed trade tension headlines. A U.S. appeals court temporarily paused a lower court ruling that <a href=\"https:\/\/t.co\/VfEmdt4MXg\" target=\"_blank\" rel=\"noopener\" title=\"\">blocked former President Trump\u2019s reciprocal tariffs<\/a>, restoring the legal groundwork for their enforcement.<\/p>\n\n\n\n<p>This development has reintroduced geopolitical uncertainty into currency markets, and with the euro\u2019s recent strength fuelled largely by relative rate divergence, the fresh volatility risks skewing sentiment back toward the greenback in the near term.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>EURUSD rose sharply from the 1.12108 low on 9 May to a peak of <strong>1.13900<\/strong> on 30 May, marking a strong bullish recovery across multiple sessions. However, momentum has since faded, and price has gradually retraced toward the <strong>1.13360<\/strong> region, just above the 30-period moving average. The decline is accompanied by a bearish MACD crossover, indicating that the recent uptrend may be losing steam in the short term.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image-36-1024x446.jpg\" alt=\"\" class=\"wp-image-23811\"\/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: EURUSD eases from 1.139 peak, stalls near 1.133 as bullish momentum fades and consolidation sets in, as seen on the <a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\" target=\"_blank\" rel=\"noopener\" title=\"\">VT Markets app<\/a><\/em><\/p>\n\n\n\n<p>While the 1.139 level now acts as immediate resistance, support seems to be forming around the <strong>1.13270\u20131.13300<\/strong> zone. If the pair fails to regain upward momentum, we could see further downside toward the 1.1300 handle. A break above 1.139 would be required to resume the bullish structure, though the flattening MAs suggest consolidation may take precedence in the near term.<\/p>\n\n\n\n<p>In the broader context, while <strong>EURUSD<\/strong> is still holding above key May lows, its rejection from <strong>1.13900<\/strong> and weakening Eurozone data leaves it vulnerable to any upside surprises from the U.S. economic front \u2014 especially around core PCE and payrolls.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a><\/strong><strong> and <\/strong><strong><a href=\"https:\/\/myaccount.vtmarkets.com\/login?_gl=1*1azgbap*_gcl_au*NjE5NTE3MjY4LjE3NDQ2MDA3NDI.*_ga*MTY4OTgwNTU5Mi4xNzM2NzQ2MTgy*_ga_J26NL1ZVX7*czE3NDQ5NDQ0NTYkbzEyMCRnMCR0MTc0NDk0NDQ1NiRqNjAkbDAkaDA.\">start trading<\/a><\/strong><strong> now.<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>EURUSD fades from 1.139 peak after dismal German retail sales and soft French-Spanish inflation trigger dovish ECB expectations. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":20946,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[56,10],"class_list":["post-23810","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-euro","tag-forex"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/23810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=23810"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/23810\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/20946"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=23810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=23810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=23810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}