EUR/USD Supported as Eurozone CPI Hits 3.2%, Core Inflation Beats Forecast

Eurozone preliminary CPI for May came in at 3.2% year-over-year, matching expectations and accelerating from the prior 3.0% reading, providing a supportive backdrop for EUR/USD. Core CPI surprised to the upside at 2.5% versus the 2.4% consensus, up from 2.2% previously, signaling broadening inflationary pressures across the region. Energy prices remain the primary driver, rising 10.9% year-over-year despite a 1.1% monthly decline. Notably, services inflation advanced 0.4% on the month, suggesting persistent underlying price pressures that may complicate the European Central Bank's policy calculus. The hotter-than-expected core reading strengthens the case for the ECB to maintain a hawkish stance or delay rate cuts, which is broadly euro-positive. Traders should monitor ECB commentary in the coming sessions for any shift in forward guidance. Near-term, the combination of sticky core inflation and elevated services costs could provide a floor for EUR/USD, while resistance remains tied to broader USD dynamics and risk sentiment. This data reinforces that the disinflationary path in the Eurozone remains uneven.