EUR/USD Breakout Stalls at 1.1900 as Dollar Tensions Persist

EUR/USD has delivered a technically significant bullish breakout, but momentum has stalled at a historically important resistance zone near 1.1900. The pause reflects a broader tension in the US dollar, which is being pulled between policy-driven tolerance for weakness and resilient macro fundamentals. While momentum indicators remain constructive, price action suggests caution is warranted near current levels.

Macro Backdrop: USD Caught Between Policy and Data

The US dollar is currently influenced by opposing forces, creating uneven conviction across FX markets.

On the policy side, recent remarks from US Treasury Secretary Scott Bessent have been interpreted as signalling discomfort with excessive dollar strength, particularly against Asian currencies. That perception was reinforced by reports of rate checks in USD/JPY by the New York Fed, often viewed as a precursor to intervention. Together, these developments have strengthened the view that US authorities may be tolerant of, or even supportive of, a softer dollar.

Political risk has added to that pressure. Renewed tariff threats, even when partially walked back, have contributed to uncertainty and reinforced a broader “sell America” narrative, weighing on USD sentiment beyond Asia and into G10.

However, this policy-driven weakness is being challenged by firm US macro momentum. Economic data continue to surprise to the upside, with real-time growth estimates pointing to an economy running above trend. Rate cut expectations for 2026 have been scaled back accordingly, reflecting upside risks to inflation and limited slack in the labour market. This macro backdrop argues against chasing USD weakness indiscriminately.

The result is a dollar environment defined by tension rather than trend.

Technical Outlook: Breakout Meets Historical Resistance

That macro tension is now clearly visible in EUR/USD price action.

The pair confirmed a bullish breakout last week, resolving a multi-week bull pennant with a sharp upside move. However, the rally stalled quickly near 1.1900, a level with clear historical significance. EUR/USD failed to sustain gains above this zone in late 2025, with repeated rejections also seen during the second half of 2021.

The lack of immediate follow-through above 1.1900 is notable. While the breakout itself remains valid, hesitation at this level raises the risk of consolidation or a corrective pullback rather than straight-line continuation.

Momentum indicators remain supportive. RSI continues to trend higher without reaching overbought territory, while MACD has confirmed a bullish crossover and is extending. From a momentum standpoint, the path of least resistance remains higher, but price acceptance above resistance is required to reinforce that view.

EUR/USD Daily Chart

Key Levels

• 1.1900 Major historical resistance and near-term pivot. A decisive break and close above this level would strengthen the bullish case.

• 1.1990 to 1.2000

  The initial upside objective if 1.1900 gives way, with prior heavy selling interest in this zone.

  
  

• 1.2267 and 1.2350

  are higher-timeframe resistance levels that come into focus only on a sustained break above 1.2000.

  
  

• 1.1800

  The initial downside level if 1.1900 continues to cap gains, with former pennant resistance also acting as potential support.

  
  

Scenarios

Bullish Continuation A daily close above 1.1900, ideally clearing the September 2025 high, would confirm acceptance above resistance. In that case, upside risk opens toward 1.2000 initially, with higher levels coming into view on sustained strength.

Range or Pullback Repeated failure at 1.1900 would suggest that the breakout is stalling in the face of macro and historical resistance. In this scenario, downside risk increases toward 1.1800, with scope for broader consolidation.

Event Risk and Outlook

The upcoming calendar is busy but may struggle to generate sustained trends given the broader macro tension.

Euro area GDP and German inflation data later in the week will provide context but are unlikely to shift the bigger picture unless surprises are significant. In the US, the Federal Reserve meeting is expected to be uneventful from a policy standpoint, placing greater emphasis on tone, particularly around labour market conditions. Inflation and employment data later in the week will help refine expectations but may reinforce the current stalemate rather than resolve it.

Bottom Line

EUR/USD has produced a valid bullish breakout, but progress has stalled at a historically significant resistance level. Momentum remains constructive, yet the broader macro environment argues for selectivity rather than aggressive trend chasing. A sustained break above 1.1900 is needed to unlock further upside, while continued rejection keeps the risk of consolidation or pullback firmly in play.