EUR/USD Faces Pressure as Spain CPI Jumps to 3.6%, ECB Path Uncertain

Spain's final July CPI confirmed an acceleration to 3.6% year-over-year, surpassing the preliminary estimate of 3.5% and marking a notable increase from June's 3.2% reading. The harmonized index (HICP) also came in above expectations at 3.9% versus the 3.8% preliminary print, up from 3.6% previously. The uptick was largely driven by a renewed rise in petrol prices, adding to persistent core inflation pressures across the eurozone's fourth-largest economy. This data complicates the European Central Bank's policy calculus, as sticky inflation may delay anticipated rate cuts and support the euro in the near term. EUR/USD traders should monitor how this feeds into broader eurozone aggregate inflation data, as hotter-than-expected readings could reinforce hawkish ECB expectations. The divergence between softening US inflation and rising Spanish CPI creates a potential tailwind for the euro. Key technical levels to watch on EUR/USD include nearby resistance zones that could be tested if eurozone inflation surprises continue to the upside.