EUR/USD Pressured as German Consumer Sentiment Weakens Further

German GfK consumer sentiment for August came in at -29.6, slightly worse than the expected -28.5, signaling continued deterioration in household confidence heading into the second half of the year. While economic expectations showed marginal improvement, income expectations remain firmly depressed, reflecting ongoing concerns among German households about their financial outlook over the coming year. Notably, the willingness to save among consumers increased, indicating a more cautious spending posture that could weigh on domestic demand and broader Eurozone economic growth. This weaker-than-expected reading adds downside pressure on EUR/USD, as persistent consumer pessimism in Europe's largest economy raises questions about the ECB's ability to tighten further without exacerbating economic weakness. The data suggests that despite improving macro sentiment, the transmission to household-level confidence remains incomplete. EUR crosses may face headwinds as traders factor in the risk of slower Eurozone recovery. Near-term EUR/USD support levels will be closely watched, with the pair vulnerable to further softness if upcoming Eurozone data confirms the cautious consumer trend.