EUR/USD Under Pressure as Eurozone Confidence Plunges, Inflation Fears Surge

EUR/USD faces renewed selling pressure as the April Eurozone economic sentiment survey delivered a sharply disappointing set of readings, raising stagflation concerns across the bloc. Economic confidence dropped to 93.0, well below the 95.2 consensus, while industrial confidence fell to -7.7 versus -7.2 expected and services confidence collapsed to 0.9 against a 3.5 forecast. Consumer confidence was confirmed at -20.6. Most alarmingly, consumer inflation expectations surged to 49.1 from 43.5 prior, driven by persistently elevated energy prices weighing on household purchasing power. The combination of deteriorating growth prospects and rising inflation expectations puts the European Central Bank in a difficult policy bind, limiting its room for rate cuts to support the economy. Traders should monitor EUR/USD support near the 1.0750-1.0780 zone, with potential downside acceleration if risk sentiment deteriorates further. Resistance is seen near 1.0850. The data reinforces a bearish macro backdrop for the euro, with upcoming Eurozone GDP and CPI prints likely to drive the next directional move.