EUR/USD Eyes 1.1600 Breakout for Next Bullish Wave

EUR/USD is testing the crucial 1.1600 resistance level, with traders anticipating a potential breakout that could trigger the next significant bullish leg. The pair has gained approximately 0.4% (45 pips) this week, supported by a weakening US Dollar Index which has retreated from recent highs near 106.50. Technical indicators suggest building momentum, with the RSI approaching overbought territory at 68 and the 50-day moving average providing dynamic support at 1.1520. The euro's strength stems from improving risk sentiment and expectations that the ECB will maintain its hawkish stance longer than the Fed. A decisive break above 1.1600 could open the path toward 1.1700 and potentially 1.1800, levels not seen since early 2024. However, failure to breach this resistance may result in consolidation between 1.1500-1.1600. Traders are closely monitoring upcoming US inflation data and ECB officials' speeches for directional cues.