EURUSD Technical Analysis: Euro Weakens Below 1.18 as Bearish Momentum Isn't Fading

EURUSD futures | 4-hour chart | Analyst: Itai Levitan | investingLive.com

And it shows that bears continue to be in control. This comes at no surprise to many of us, especially those that got the heads up last week at our Telegram Channel.

The EUR/USD pair is currently exhibiting persistent selling pressure near the 1.18 level, driven by order flow dynamics that suggested last week, as I showed in my analysis, distribution rather than accumulation. While price action may appear orderly on the surface, deeper analysis reveals that buying activity is inefficient and value is migrating lower, with positive delta bursts failing to sustain higher prices. Key technical levels to watch include 1.18135 (yesterday's VWAP) and 1.1806 (today's VWAP), which act as resistance; as long as the price remains below these markers, the bearish bias remains intact. A clean break below the psychologically significant 1.18 handle would further strengthen the case for a bearish continuation, while sustained acceptance above VWAP levels is required to challenge seller control.

And what aboute this week in Euro FX Futures? We see immediate selling pressure on the Euro marks a sharp reversal from the broader trends observed over the last twelve months, as the US dollar holds firmer to officially get the new year underway. While the current environment favors the greenback due to safe-haven flows, it stands in contrast to the previous year where the Euro was the big winner in foreign exchange, having rallied 13.3% against the dollar in 2025 driven by pragmatic policy shifts and a "less bad" economic outlook. Looking elsewhere in North America, the Canadian Dollar outlook for 2026 suggests further upside; despite fears regarding US trade policy, analysts believe tariff risks are overblown and that the "Loonie" could gain another 5% this year, supported by commodity strength and political stability under the Carney government.

EURUSD technical analysis highlights

• EURUSD rejected strongly from the 1.18 resistance zone, reinforcing a bearish bias for the Euro.

• The EURUSD 4-hour chart shows a clear loss of bullish structure after a pitchfork breakdown.

• EURUSD futures are now trading below an anchored VWAP, pressing into lower standard deviation territory.

• The bearish EURUSD scenario remains active unless price closes a 4-hour candle above 1.17425.

Why 1.18 remains a critical EURUSD resistance

In last week’s EURUSD technical analysis, the 1.18 level was highlighted as a major resistance zone for the Euro. That area represented more than a psychological round number, it aligned with prior volume acceptance and structural resistance visible on the EURUSD futures chart.

Price reacted precisely as anticipated. EURUSD failed at 1.18, confirming that sellers were active at that level. The short-side thesis was activated, and partial profits were already taken, as shared earlier through the investingLive Stocks Telegram channel.

Since that rejection, the EURUSD trend structure has weakened further, shifting the focus toward downside continuation rather than consolidation.

EURUSD 4-hour chart: structure breakdown and VWAP pressure (see video above)

On the 4-hour EURUSD futures chart, the Euro is currently down about 0.36%, with two key technical developments shaping the outlook:

1. Pitchfork failure on EURUSD

The upward pitchfork that had previously guided EURUSD higher has now been decisively lost. When EURUSD breaks below a well-respected pitchfork, it often signals that bullish momentum has faded and that the market is transitioning into a bearish phase.

2. EURUSD trading below anchored VWAP

The current VWAP is anchored from the December 9, 2025 pivot low, a key reference point for institutional positioning. EURUSD is now trading near the 1st lower standard deviation of that VWAP, around 1.17205.

Historically, when EURUSD accepts below VWAP deviations after losing structure, the market tends to extend lower before attempting any meaningful rebound.

EURUSD downside levels to monitor

From a volume profile and EURUSD technical perspective, downside continuation remains the favored scenario.

• Today’s low: approximately 1.1710
  A clean break below this level would signal further bearish acceptance.

• Next EURUSD support target: 1.16945
  This level is derived from prior EURUSD volume profile analysis and represents the next potential reaction zone.

At this stage, EURUSD does not show reversal characteristics. Price behavior remains consistent with trend continuation rather than seller exhaustion.

Bearish EURUSD invalidation level

Clear invalidation is essential in any EURUSD trading plan.

The bearish EURUSD scenario would be invalidated or seriously questioned if:

• EURUSD closes a full 4-hour candle above 1.17425, which corresponds to the open of the current EURUSD futures session candle.

A sustained close above that level would suggest a loss of downside control and open the door to a rotation back toward value.

EURUSD trading context and risk note

At present, EURUSD is not a long setup. The broader EURUSD trend, VWAP positioning, and volume profile structure all argue against attempting to pick a bottom.

As always:

• Trade at your own risk.

• Use defined invalidation levels.

• Adjust position sizing to volatility conditions.

For more EURUSD analysis, additional order flow perspectives, and multi-asset coverage, return to investingLive.com, where this EURUSD video analysis is embedded alongside broader market context.