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Why Is EUR/USD Struggling Below 1.0950? Key Factors Impacting the Currency Pair

The which crypto to buy today for long-termEUR/USD currency pair continues to face resistance below the 1.0950 level during early Asian trading hours on Monday. Renewed demand for the US Dollar (USD) has created headwinds for the pair, which currently hovers around 1.0935, marking a 0.08% decline for the session.

Recent economic data from Germany reveals concerning trends in Europe's largest economy. Third quarter GDP figures showed a 0.1% quarterly contraction, with annual GDP declining 0.4% compared to previous estimates of 0.3% contraction. These disappointing numbers follow comments from ECB Vice President Luis de Guindos, who warned about downside risks to the European economic outlook while acknowledging potential inflationary pressures in coming months.

Adding to the Eurozone's challenges, Germany's constitutional court recently ruled against the government's plan to repurpose 60 billion Euros of unused COVID-19 emergency funds for current spending programs. This decision creates significant budgetary constraints, particularly affecting climate-related initiatives, and may further weigh on economic recovery prospects.

Across the Atlantic, the latest US PMI data presents a mixed picture. While the Composite PMI remained stable at 50.7 in November, the Manufacturing PMI dipped into contraction territory at 49.4, below both prior readings and market expectations. The Services PMI showed modest improvement at 50.8, slightly exceeding forecasts.

Market participants now turn their attention to upcoming economic releases that could significantly impact currency valuations. Key events include Wednesday's Eurozone Consumer Confidence report, followed by Thursday's German Retail Sales and inflation data. The US economic calendar features housing market indicators, Consumer Confidence figures, Q3 GDP estimates, and ISM Manufacturing PMI data.

These fundamental factors collectively create an environment where the EUR/USD pair may continue to experience volatility. Traders should monitor these developments closely as they assess potential trading opportunities in the currency markets.