EURUSD Under Pressure - Inflation Reality Meets Technical Exhaustion (25 February 2026)

Current Market Tone

As of today, EURUSD is losing its upside momentum and shifting downwards. What previously looked like a steady bullish continuation is now showing signs of exhaustion. 

The broader tone is cautious. The market is no longer confident in buying the euro and there’s a growing sense that the pair may be preparing for a corrective decline rather than continuation higher.

Eurozone CPI

Today‘s Eurozone CPI release was central to the narrative. Inflation numbers came out in line with the expectations and reinforced a key macro- theme that inflation in the area is cooling. Besides, the European Central Bank has less urgency to tighten its policy. Given this, the rate differentials would continue to favor the US dollar.  In other words, softer inflation reduces support for the euro.

The local currency needed a positive surprise to extend higher, as the neutral reading increases the downside risk, but…

EURUSD Current Structure (H1)

Support Zones

1.17700 → First structural support1.17400 → Stronger demand zone

Resistance Zones

1.18100 – Recent supply zone1.18400 – Recent local high zone

A failure to break and hold above 1.18400 increases the probability of reversal. Meanwhile, the price is about to break the local uptrend, marked with yellow in the chart. At the same time, a daily close below 1.17400 would confirm a shift from bullish continuation toward a corrective decline.

Why the Pair Is Likely to Decline

• The price action shows some hesitation and point lower intraday highs – the pair rallied strongly two days ago, but momentum indicators are fading out and the market doesn’t make strong impulsive moves upwards any longer.
• The US dollar is no longer weakening aggressively either. Yields have stopped falling and the risk appetite stopped expanding further. EURUSD tends to lose its bullish steam without fresh greenback’s declines.
• Late buyers often catch the missing train after a strong upward move. If the price fails to break the resistance zone, these positions become vulnerable, accelerating a downside move, should the support level give way.

Forecast and Probable Scenario

This would not necessarily mean a long-term trend reversal.  As long as the mood has shifted from confident buying toward cautious positioning, a healthy correction is likely to succeed. 

Currently, given soft eurozone CPI data and firm USD macro- stance, EURUSD   is more likely to decline than extend higher in the near term as the balance of risk is tilted to the downside.

EURUSD struggles near its 1.17700 support line, and if the sellers regain control below the line, the pair might correct lower toward 1.17400. In the meantime, we’ll define the 1.17100 level as the lowest support, should the decline deepen.

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