EUR/USD Technical Analysis: Breakout Holds as Bulls Target 1.1600

EUR/USD is trading near 1.1510 after breaking above the descending trendline that had controlled price since the April highs. The breakout has improved the technical outlook on both the four-hour and daily charts, although the pair is now approaching an important resistance area between 1.1580 and 1.1619.

The broader bias remains bullish while price stays above the 1.1430–1.1460 support region. However, upcoming US economic releases could produce increased volatility before EUR/USD confirms its next major direction.

EUR/USD Daily Chart Analysis

The daily chart shows a clear breakout above the multi-month descending trendline. EUR/USD has also moved above the 50-period and 100-period moving averages around 1.1430–1.1440, indicating that buyers are regaining control of the medium-term trend.

Daily RSI is trading near 65, reflecting strong bullish momentum. However, the indicator is also approaching overbought territory. This means the pair may consolidate or experience a temporary pullback before attempting another move higher.

The first major resistance zone is located between 1.1580 and 1.1600. Above this area, the horizontal resistance at 1.1619 will be the main level to watch.

A daily close above 1.1619 could strengthen the bullish structure and open the way towards 1.1650, followed by the psychological 1.1700 level.

EUR/USD H4 Chart Analysis

On the four-hour chart, EUR/USD continues to hold above the broken descending trendline and the important moving-average support region around 1.1430–1.1440.

H4 RSI has cooled towards 55 after previously approaching overbought levels. This shows that short-term momentum has weakened slightly, but there is no confirmed bearish reversal at this stage.

Immediate resistance is located around 1.1540–1.1550. A sustained break above this area would allow buyers to challenge the 1.1580–1.1600 supply zone.

A rejection from the current area could send EUR/USD towards the first demand zone between 1.1435 and 1.1460. This region includes the moving averages, the previous breakout area and an important short-term price imbalance.

A deeper retracement could take the pair towards the second demand zone between 1.1370 and 1.1400. Both support zones may attract buyers while the broader breakout structure remains intact.

EUR/USD Fundamental Outlook

The euro is receiving support from improving economic activity in the eurozone and persistent inflationary pressure. Stronger growth and inflation remaining above the European Central Bank’s target reduce the need for aggressive monetary easing.

The ECB continues to follow a cautious and data-dependent approach. Any indication that policymakers are prepared to keep interest rates elevated for longer could support the euro, particularly if eurozone economic data continues to improve.

The US dollar remains supported by relatively high interest rates and stronger manufacturing activity. However, signs of slower US economic growth may limit the dollar’s upside unless upcoming employment, services and inflation data remain strong.

The Federal Reserve’s policy outlook will remain an important driver for EUR/USD. Strong US data could reduce expectations of interest-rate cuts and support the dollar, potentially pushing EUR/USD into a deeper correction.

Weak US data could increase expectations of monetary easing and help EUR/USD extend its recovery towards 1.1600 and 1.1619.

Traders should therefore watch upcoming US labour-market data, services activity, inflation figures and comments from Federal Reserve officials. These releases could determine whether the recent technical breakout develops into a broader bullish move.

EUR/USD Key Levels

Resistance: 1.1540, 1.1580–1.1600 and 1.1619

Support: 1.1500, 1.1435–1.1460 and 1.1370–1.1400

Major support: 1.1324

EUR/USD Outlook

The EUR/USD technical outlook remains bullish while the pair holds above the 1.1430 support area.

A sustained break above 1.1550 would increase the probability of a move towards the 1.1580–1.1600 supply zone. A successful breakout above this region would bring the major 1.1619 resistance level into focus.

A temporary correction towards 1.1460 or 1.1430 would not invalidate the bullish structure. Instead, these areas may provide another opportunity for buyers if the pair produces a clear bullish reaction.

Even a deeper pullback towards 1.1370–1.1400 could remain constructive while price stays above the broader trendline and major support.

The bullish outlook would weaken if EUR/USD closes below 1.1370. A decisive break below 1.1324 would invalidate the current breakout structure and return control to sellers.