EUR/USD edges higher as German GDP shows 0.2% growth in 2025

EUR/USD traded 0.1% higher at 1.0745 following Germany's GDP data release, which showed a modest 0.2% expansion in 2025 after two consecutive years of contraction (-0.9% in 2023 and -0.5% in 2024). The marginal growth provides temporary relief from stagflation concerns that have weighed on the euro, though underlying economic conditions remain fragile. Market participants noted that persistent inflation pressures across the eurozone continue to complicate the European Central Bank's policy outlook. The tepid recovery in Europe's largest economy suggests limited upside potential for the euro in the near term. Technical levels show EUR/USD facing resistance at 1.0780, with support established at 1.0720. Traders remain cautious as economic fundamentals point to continued weakness in the German economy despite the positive headline figure, with focus shifting to upcoming eurozone inflation data for further directional cues.