EUR/USD reaches 33-month peak on rising CPI and hawkish ECB stance

EUR/USD has surged to a 33-month high as Eurozone inflation data exceeded expectations and the European Central Bank maintained its hawkish rhetoric. The latest CPI figures showed persistent price pressures across the euro area, reinforcing market expectations that the ECB will need to maintain or potentially increase its restrictive monetary policy stance. The euro's strength reflects growing divergence between ECB and Federal Reserve policy outlooks, with the Fed showing signs of a more dovish pivot while the ECB remains committed to fighting inflation. Technical momentum remains strongly bullish, with the pair breaking through multiple resistance levels that had held since early 2022. The combination of robust inflation data and ECB officials' hawkish commentary suggests the euro could maintain its upward trajectory. Traders should monitor upcoming ECB communications and US economic releases for potential catalysts that could either extend the rally or trigger profit-taking at these elevated levels.