On Wednesday, EUR/USD continued to advance, testing the 1.1267 level. The US dollar weakened against the euro amid the US midterm elections, as preliminary results indicated that the Democratic Party had managed to gain control of the Senate and secure a majority in the House of Representatives, winning seats previously held by Republicans.

As Democrats currently hold the initiative, they are expected to secure majorities in both the House of Representatives and the Senate. If this scenario materializes, the US dollar is likely to remain under pressure, as Democratic control of both chambers of Congress would act as a constraint on government spending during Trump's presidency.

A party needs 51 seats to control the upper chamber of Congress, while a majority in the House of Representatives requires 218 seats. Following decisive victories in Texas, Iowa, Kansas, and South Carolina, Democrats increased their representation to 52 seats.

According to real-time data from Decision Desk HQ, the Democratic Party has already secured 224 seats in the US House of Representatives, while Republicans hold 131 seats.

European Central Bank (ECB) Governing Council member Joachim Nagel adopted a notably more hawkish tone than usual. The FXS Speechtracker indicator reached 8.2, compared with its historical average of 7.0, indicating a clear shift toward a more restrictive monetary policy stance.

His remark that "an interest rate hike will most likely be necessary in December," together with his characterization of inflationary pressures as being close to an adverse scenario, creates conditions for higher euro-denominated yields and supports the European currency in the Forex market.

Nagel also emphasized that the ECB "is both able and obliged to prevent the surge in energy prices from turning into widespread inflation." This position confirms the regulator's determination to contain second-round inflationary effects and reinforces the hawkish tone of his remarks. His confidence that France can "resolve its fiscal problems," coupled with the qualification that "this does not fall within the remit of monetary policy," suggests that fiscal risks are not yet viewed as a factor capable of preventing further ECB tightening. Accordingly, market expectations for eurozone interest rates remain tilted toward further increases rather than an imminent reversal in monetary policy.

From a technical perspective, the pair maintains a positive bias on both the hourly and four-hour charts. A break above 1.1267, where the 200-period simple moving average (200-SMA) and 200-period exponential moving average (200-EMA) converge, would ease bearish pressure in the near term. The nearest significant support levels are provided by the 100-EMA, followed by the psychological 1.1200 level and a confluence of several moving averages, including the 100-SMA. The oscillators on the four-hour chart are in positive territory, supporting the bullish outlook, while the Relative Strength Index (RSI) is approaching overbought territory, warning of a possible correction or consolidation.

However, it is worth noting that the oscillators on the daily chart have not yet moved into positive territory, indicating that the pair remains under pressure from a longer-term perspective.