The pair retreats toward 1.1500 support after US inflation data fails to sustain dollar weakness amid rising energy costs.
EUR/USD fell to 1.1521 on Wednesday, erasing earlier gains as the US Dollar rebounded despite softer-than-expected US Consumer Price Index data. Headline CPI eased to 3.4% and core to 2.5%, initially weakening the dollar but failing to hold as energy prices and geopolitical risks supported safe-haven demand.
The US Dollar Index (DXY) recovered near the 100 mark after dropping to 99.61, pulling EUR/USD lower following repeated rejections at its 100-day Simple Moving Average. Technical indicators show a neutral-to-slightly bullish bias, with the pair holding above 1.1500 but losing momentum as the MACD histogram fades.
Limited progress in Middle East tensions and concerns over the Strait of Hormuz added to dollar strength, offsetting the initial reaction to cooler inflation data.