EUR/USD Price Forecast: At make or a break near 1.1330

The Euro (EUR) is trading at roughly 1.1356 against the US Dollar (USD) during the European trading session on Wednesday, marking a 0.13% increase. This surge occurs as the US Dollar faces pressure, primarily due to a reassessment of hawkish Federal Reserve (Fed) expectations following comments from New York Fed Bank President John Williams.

Williams specifically denied the urgency of another interest rate hike just before the US mid-term elections, despite the Federal Reserve's inclination to tighten monetary policy if economic conditions warrant it. The table provided below illustrates the percentage change in USD against various major currencies, with the US Dollar being the weakest among them.

Analysts at MUFG highlight that the recent upward momentum of the US Dollar has been tempered by Williams' strong stance against the notion of an immediate Fed rate hike. However, he did not rule out further policy tightening if economic indicators align with expectations. Investors are now eagerly anticipating the release of German preliminary Harmonized Index of Consumer Prices (HICP) data for September, which will be published at 12:00 GMT.

This report is expected to reveal that price pressures accelerated to 3.1% Year-on-Year (YoY) from the August figure of 2.9%. Similarly, a monthly increase in price pressures by 0.5% is also anticipated, surpassing the previous reading of 0.2%. The German inflation data will have a significant impact on the European Central Bank's (ECB) future interest rate projections.

Currently, the EUR/USD pair is hovering around 1.1355, extending a bearish short-term outlook as the price remains below the 20-period exponential moving average (EMA) at 1.1464, acting as immediate resistance. The pair is under pressure, but the Relative Strength Index (14) at 27 suggests oversold conditions, potentially slowing the downside rather than sparking a sustained rebound while price remains below the EMA.

Should the pair decisively close below the September 29 low at 1.1312, it could initiate a fresh leg of downside.