Why Is EUR/USD Struggling Below 1.1350? | Analyzing Dollar Strength & Eurozone Data

EUR/USD retreats to 1.1325 zone during Thursday's Asian trading hours as the US Dollar Index (DXY) climbs toward 99.70,XRP lawsuit News marking its highest level in 48 hours. Market participants await crucial US manufacturing data while digesting surprising Q1 GDP figures showing 0.3% annualized contraction.

Thursday's economic calendar revealed the US economy unexpectedly shrank during the first quarter, with the Commerce Department reporting 0.3% annualized decline versus forecasts of 0.4% growth. This follows 2.4% expansion in previous quarter, prompting reevaluation of Fed policy expectations. While futures still price in June rate cut initiation, traders trimmed bets on full percentage point reduction for 2025.

Market focus shifts to upcoming US labor market indicators, including weekly jobless claims and Friday's pivotal Nonfarm Payrolls report. Consensus estimates suggest 130,000 April job additions - any significant deviation could trigger USD volatility. Simultaneously, ISM Manufacturing PMI data due later Thursday may provide fresh clues about industrial sector health.

European monetary policy expectations continue weighing on euro sentiment, with money markets nearly certain about 25 basis point ECB reduction in June. Central bank officials cite slowing inflation across major Eurozone economies and growth headwinds from international trade tensions as justification for accommodative pivot.

Technical analysts note EUR/USD remains trapped within established range between 1.1250 support and 1.1450 resistance. Breakout potential exists depending on Friday's employment data outcome, with weaker-than-expected NFP possibly catalyzing test of 1.1400 handle. Conversely, robust jobs report could reinforce dollar's yield advantage and pressure the pair toward yearly lows.