Eurozone inflation fell below expectations in May that was mainly expected after negative CPI readings from Germany and Spain on Tuesday and weak numbers from France today.

EU flash CPI came at 1.4% in May against consensus at 1.5% and 1.9% in April.

Core CPI was 0.9% in May, below forecast at 1.0% and 1.2% previous month.

Persisting problem with low inflation in the zone was the one of key factors that kept ECB on ultra-low rates and extended QE.

Today’s release may add on existing pressure and overshadow ECB’s 8 June policy meeting when the central bank is expected to shift forward guidance, according to speculations that circulated in the market on Tuesday and sent the Euro higher.

The EURUSD pair bounced towards session high at 1.1196 after being entrenched within narrow range after data release. Pair’s near-term structure is positive but action stays capped under pivotal 1.1200 barrier, break of which is needed to signal stronger recovery.

US housing data due later today may provide fresh direction signals.