EUR/USD faces pressure as German inflation data looms ahead

EUR/USD trades cautiously near 1.0820 as markets await crucial German state CPI readings later today, which could influence the European Central Bank's monetary policy stance. Germany's core annual inflation unexpectedly accelerated to 2.8% in September from 2.5% in August, presenting challenges for ECB policymakers who have maintained their current stance. The persistent inflation pressures in Europe's largest economy have become a significant obstacle for potential policy easing, keeping the euro supported despite broader economic concerns. Technical indicators suggest immediate resistance at 1.0850 while support holds at 1.0800. The upcoming inflation data will be closely watched as any upside surprise could strengthen hawkish ECB expectations, potentially pushing EUR/USD toward the 1.0880 level. Conversely, softer readings might trigger a test of support levels as markets reassess the timeline for ECB policy adjustments.