For the four trading sessions in a row, the EUR / USD pair is moving in an upward correction to reach the resistance level of 1.1248 at the time of writing the analysis and its highest level in two weeks starting from the support level 1.1026 recorded last week, the pair's lowest level in two years. The correction is supported by the results of the US economic data which confirm that the US economy is beginning to suffer. The most significant recent event was the Federal Reserve's decision to cut its benchmark interest rate by 25bp last week, and below expectations for significant economic data led by job numbers and PMIs. In addition, uncertainty about trade relations between the United States and China increased after the announcement of 10% trade tariffs on Chinese goods worth $ 300 billion. China is expected to retaliate, which could lead to an expansion of the global trade war.
From a technical perspective: In the short-term, the EUR / USD appears to have a strong bullish bias, following the RSI's trend after dropping to overbought levels recently. This sets new trading targets for both bulls and bears. Bulls are aiming for a run towards 1.1223 while bearish bears are looking to the downside support at 1.1183 as the first stage of a return to the downside. In the long term and according to the daily chart, the EUR / USD is still trading within a bearish channel, indicating that it is in the long term, and in terms of economic news. Manufacturing PMIs in the euro zone and the euro zone's largest economies showed contraction in June, as the manufacturing sector continued to falter. On the inflation front, the Eurozone CPI fell to 1.1% in July, the lowest level since December 2016. In contrast, there was positive news from the Eurozone retail sales, which posted sharp gains of 1.1%.
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