EUR/USD made a decisive break of the 1.11 level in the last day of July. This level had formed a decent support area around it in recent months, but it was broken after the FED didn’t turn as dovish as markets were expecting in the last meeting two weeks ago. But, Trump’s announcement for additional tariffs on China in the first day of August turned the USD bearish and this pair surged nearly 250 pips higher in the following sessions.

But, the situation surrounding the Euro is much worse than in the USD, so EUR/USD traders didn’t have many reasons to keep pushing higher and keep this pair bullish. Last week this pair was consolidating and the highs were getting lower, which was a sign that the larger bearish trend was going to resume again.

Today, we see that EUR/USD has slipped 50 pips lower and has broken last week’s lows, but it is facing the 100 SMA (green) now on the H4 chart. This moving average has provided resistance before and it turned into support last week.

Now EUR/USD is facing this moving average again. Above the 100 SMA and EUR/USD remains bullish, below it and this pair will turn bearish again. So, this moving average will be the decisive factor for the short term trend in this pair.