EURUSD Fails to Make New Highs

The ECB (European Central Bank) doesnt seem very determined to strengthen the interest rate policy, which could be shying away investors.

GBP/USD, which tends to move relatively the same as EURUSD has seen stronger moves, further proving that the Euro is weakening but the dollar isnt strengthening. Even amidst all the chaos, it seems like investors are favoring the dollar over the Euro as a safe haven.

The resistance level is also a big reason, as price approached 1.18041, it lost a significant amount of volume and struggled to go on further.

In good news, you can also see that price failed to break below the lows at

1.17022, which does provide some strength and possibility for recovery. Looking at higher time frame price action (Weekly Time Frame) we can easily identify the cause of this failure and the context for what might happen and why it might happen.

For the entire year of 2025, EURUSD was bullish, and the retracements we saw were not big enough to shake out bulls and bring in some more bears. The retracements were small and barely noticeable, for example; from January up until August, we did not break market structure ONCE. When we finally did, it didnt follow through, but instead just consolidated.

That was the story for the second half of the year, just up and down, no clear trends and no indication for where price wants to go. A lot of major pairs followed the same path and will also possibly see the same direction against the dollar in 2026.

More than likely, this year will be a retracement year for EURUSD, so here are some levels to consider.

First of all, lets just get the high out of the way. 1.19188 is the high of the consolidation range, and if broken, two possibilities can occur. It can either continue the trend, or a fakeout.

Now, the more important levels are; 1.13919, 1.10657 & 1.07330. These levels mark three important lows, the first marks the break of the 6 month consolidation range, and if broken, it will give the retracement enough strength to push all the way down. The other two levels are just 2 lows that were one of the only short retracements we saw last year.

It is also important to note that while it seems highly unlikely, we can still continue this uptrend into 2026 as dollar volatility can bring strength into the Euro and remove some from the dollar.