EUR/USD Holds 1.0600 Support Ahead of Eurozone Inflation Data

EUR/USD trades defensively at 1.0610, down 0.1% in early European trading after touching a two-week high of 1.0650 on Monday. The pair consolidates ahead of crucial Eurozone HICP inflation data expected to show 2.3% year-over-year growth, up from 2.0% previously. German employment figures due simultaneously could influence ECB policy expectations, with unemployment rate forecast steady at 6.0%. The euro found support from yesterday's better-than-expected Eurozone manufacturing PMI at 45.2, though readings remain in contraction territory. Technical analysis reveals strong resistance at 1.0650 (two-week high), while the 1.0600 psychological level provides immediate support. The 200-day moving average at 1.0585 marks a critical level for maintaining bullish momentum. Traders await inflation data for clues on ECB's December meeting stance, with higher readings potentially supporting euro strength despite broader economic headwinds.