EURUSD is trading marginally higher today after finding a bottom at 1.1335 on Friday. The pair is clinging to the 1.14 handle but still lacks the impetus to stage a more robust and stable rebound.
Over the weekend, S&P revised the Italy’s outlook to ‘negative’ but kept the country’s credit rating unchanged. Meanwhile, Italy’s officials hinted at the possibility of changing some parts of the budget that was rejected by the EU. These developments help the euro to stay afloat for the time being.
However, the general dynamics shows that traders are still nervous and the prospects for a steady rebound in the pair look limited as the greenback remains supported amid the prevailing risk aversion, though the sentiment has marginally improved in Europe after a sell-off in Asia.
In the short term, EURUSD will likely fail to firmly regain the 1.14 figure as the political risks in Italy and Germany persist, while USD demand could reemerge at any moment as investors still prefer a cautious approach.