EUR/USD faces pressure as Spain CPI exceeds forecasts at 3.0%

EUR/USD declined 0.2% to 1.0545 as Spain's November preliminary CPI came in at 3.0% year-over-year, above the 2.9% forecast, while HICP reached 3.1% versus 2.9% expected. The higher-than-anticipated inflation data, particularly the marginal increase in core inflation to 2.6%, presents a challenge for the ECB's rate cut trajectory. Spain joins Germany in maintaining sticky inflation levels that complicate the central bank's monetary policy normalization efforts. The persistent inflationary pressures suggest the ECB may need to maintain a more hawkish stance longer than markets anticipated, supporting the euro in the near term. Technical resistance for EUR/USD sits at 1.0600, while support has formed at 1.0520. Traders should monitor upcoming Eurozone-wide inflation data for confirmation of this trend, as sustained inflation could delay ECB rate cuts into 2025.