[KostiaFM]

EUR/USD Daily Analysis: August 5, 2019

Last week, the headlines on US president Trump publicized the imposition of tariffs on Chinese goods has had a big impact on the US dollar rate. Alongside with it, this occurred simultaneously with the markets placing bets on another rate cut in September given the dovish decision of the Fed.

Considering the CME Fed watch tool, a rate cute is probable in September by about 50 basis points in a quarter percentage chance. This is not surprising but trade tariffs add could adjust the sentiment at the next Fed meeting.

EUR/USD trend changes swiftly and whose central bank, the ECB or the Fed, will ease their policies becomes uncertain already even daily. On a positive note, it seems like the technical analysis becomes more stable even if the fundamental outlook looks hazy.

The recent gains of euro major pair were primarily due to the weakened dollar and commodity instruments are in red in this month.

The level of 1.1118 plays a significant role in the trend. An upward rally countered the earlier breakdown. Hence, it is likely for the pair to drop at the beginning of the week to be sustained in this area.

The area of 1.1118 was considered to be either resistance and support. This level limits short-term gains. If we can sustain the rally tomorrow or the day after, the next probable target is around 1.1230 given the convergence of the 50- and 100MA.