On Wednesday, the European currency continued to lose ground against the US dollar for the second consecutive day. The release of German consumer inflation data failed to provide support for the single currency.

The final figures for Germany's Harmonised Index of Consumer Prices (HICP) were in line with preliminary estimates. In October, the index declined by 0.1% month-on-month, while annual inflation stood at 2.8%. By comparison, the corresponding figures in September were +0.6% and +3.3%, respectively, indicating a notable slowdown in inflation.

Meanwhile, on Wednesday, the US dollar demonstrated greater resilience than most other major currencies. This strength was driven by a combination of factors: the release of US Consumer Price Index (CPI) data that exceeded market expectations and hawkish rhetoric from Federal Reserve officials, which clearly signaled the central bank's intention to raise its key interest rate in December.

According to data released by the US Bureau of Labor Statistics (BLS), consumer prices increased by 0.4% in October, exceeding analysts' forecasts of 0.3%. Higher food prices and housing rents were the main contributors to the increase. Core inflation, which excludes volatile components, also exceeded expectations, rising by 0.3%. It should be noted that annual inflation figures were not provided due to the suspension of federal government operations in 2025.

On Wednesday, Philadelphia Fed President Anna Paulson expressed support for "further gradual tightening" of monetary policy, emphasizing its importance in achieving the inflation target. Several hours later, Dallas Fed President Lorie Logan stated: "Clearly, the Fed needs to deliver at least two more rate hikes, each by a quarter of a percentage point."

Against the backdrop of these statements, financial markets have almost fully priced in a potential rate hike at the Federal Reserve's December 9 meeting. Meanwhile, the probability of a 50-basis-point increase is estimated at 12%. These factors are contributing to the overall strengthening of the US dollar in global markets.

Nevertheless, hopes for a possible diplomatic resolution to the conflict between the United States and Iran are discouraging market participants from opening aggressive long positions in the US dollar, which is traditionally considered a safe-haven currency. On Tuesday, during a G7 meeting, US Secretary of State Marco Rubio noted that large-scale military action against Iran was not currently necessary. Earlier, on Monday, President Donald Trump emphasized that the United States supported maintaining the current status quo regarding Iran and saw no reason to escalate the conflict. These diplomatic signals could limit the potential for further declines in EUR/USD.

From a technical perspective, the pair is trading below key moving averages, while oscillators remain in negative territory, confirming the bears' advantage. The nearest resistance is the 9-day Exponential Moving Average (EMA), located near 1.1180. Above it lies the 20-day Simple Moving Average (SMA), near the round-number level of 1.1200. A decisive break above this level would be required to ease the current downward pressure.

Support is provided by the 1.1135 level. A break below this level could accelerate the decline toward the October low and subsequently toward the psychological level of 1.1100. Traders with a bearish outlook are advised to wait for a confirmed break below this level before opening positions aimed at further declines in the exchange rate.