EUR/USD forecast: Breakout holds — Can bulls clear 1.1607 next?

EUR/USD strengthens as breakout retests loom — But resistance still looms ahead

EURUSD continues its upward recovery after a clean breakout above 1.1585, marking a shift away from the prior range and manipulation low at 1.1496. Momentum favors buyers for now, but the pair is fast approaching a key overhead resistance at 1.1607, where price has historically reacted sharply.

This is a decisive moment for the euro. The breakout is real — supported by displacement and a strong bullish candle — but the presence of an H4 order block right below price signals that any pullback into 1.1560–1.1580 will be crucial.

A hold of this zone could fuel extension. A failure turns the entire upward move into a bull trap.

Main fundamental drivers behind EUR/USD right now

1. Delayed US CPI and data backlogs

The U.S. government’s delays in releasing economic data — particularly CPI, PCE, and labor reports — have reduced clarity on inflation trends.

• This uncertainty weakens USD in the short-term.
• Market participants price in a “softer dollar” narrative until data normalizes.

2. Fed December rate-cut expectations

The bond market continues to price higher odds of a December Fed rate cut, which is pressuring the dollar.

• Softer inflation expectations support EURUSD upside.
• A hawkish pushback from the Fed would reverse this dynamic quickly.

3. Eurozone sentiment stabilization

While the eurozone economy remains fragile, recent PMI stabilization has prevented further euro weakness.

• Eurozone stabilization = mild support for EURUSD
• Renewed recession fears = euro pressure resumes

4. USD sentiment dampened by government shutdown effects

The continued backlog of government operations and data verification issues has added mild downward pressure on USD.

The euro benefits by default when USD sentiment is uncertain.

News impact on EUR/USD

Recent and upcoming high-impact data shaping EURUSD:

US CPI (delayed)

• Softer expectation = bullish EUR/USD.
• Hot CPI once released = bearish EUR/USD.

Upcoming Fed communications

Any signal reinforcing a December rate cut may weaken USD further.

Eurozone flash PMIs

• Stabilizing PMI supports EUR.
• Weak PMI could cap upside near 1.1607.

Technical outlook (four-hour)

EURUSD has broken out of its previous range, reclaimed structure, and is now hovering below major resistance.

Key technical zones

• Major Resistance: 1.1607.
• Breakout Level: 1.1585.
• Bullish Order Block: 1.1560–1.1580.
• Manipulation Low / Support: 1.1496.

Price action shows a strong rally from the manipulation low, followed by a clean break of internal liquidity. The current structure is bullish, but extended — making the order block retest the ideal validation point.

Bullish scenario: Retest – Hold – Expansion toward 1.1650

For EURUSD to maintain bullish control:

• Price retests the 1.1560–1.1580 order block.
• Buyers defend the zone.
• USD sentiment remains weak due to delayed data & December rate-cut expectations.

Bullish targets

• 1.1607.
• 1.1650.
• 1.1700 (extended target).

This scenario confirms the breakout as a continuation structure.

Bearish scenario: Rejection at 1.1607 – Breakdown below 1.1585

A failure to break or hold above 1.1607 could trigger bearish reversal.

Bearish triggers:

• Sharp rejection at 1.1607.
• Break below 1.1585 structure.
• U.S. data turns unexpectedly strong.

Bearish targets

• 1.1550.
• 1.1520.
• 1.1496 (full retrace to manipulation level).

This scenario implies the bullish move was a premium distribution phase.

Final thoughts

EURUSD stands at a pivotal point. The breakout above 1.1585 is significant, but real confirmation will come from either:

• A clean hold of the H4 order block, or
• A decisive rejection at the 1.1607 resistance.

Fundamentals slightly favor EUR strength for now, but once delayed U.S. data hits the market, volatility will pick up sharply. Traders should stay flexible and monitor reactions at the exact levels outlined above.