EUR/USD faces pressure as German CPI data looms amid ECB policy concerns

EUR/USD trades cautiously around 1.0780 ahead of crucial German state inflation readings expected Monday, with the pair showing limited movement in early European trading. Germany's persistent inflation remains a key concern for the ECB, with May's core annual inflation at 2.8% significantly above the central bank's 2% target, while headline inflation stood at 2.1%. The upcoming CPI data from various German states will provide early indicators for June's national inflation figures, potentially influencing ECB policy expectations. Markets are closely watching whether inflation shows signs of further moderation after the ECB's decision to maintain rates through summer. Technical indicators suggest EUR/USD faces immediate resistance at 1.0800, with support established at 1.0750. Stronger-than-expected inflation data could bolster euro strength and reinforce expectations for prolonged ECB restrictive policy, while softer readings might pressure the single currency as markets price in earlier rate cuts.