With the recent escalation of the trade war between the US and China and the fall of equity markets the odds of a FED rate cut in Sep and Dec have increased with could see EURUSD appreciating. However, as we are not convinced the US will cut rates in Sep and Dec, and this coupled with the EU cutting rates and planning on providing further stimulus to the Eurozone economy would lead to further downside pressure on the currency pair. Therefore we maintain our short view but we would still not want to see the market pass through the resistance level at $1.126.