EUR/USD rose off today's short-term low after China's actions to shore up the yuan and the below-expected U.S. nonfarm payrolls result, but that bounce and subsequent rebounds will probably be limited.
Italian political and fiscal concerns are growing, which will keep pressure on the euro as budget negotiations set for September nR1N1RB016 approach. Fiscal concerns are driving DE-IT yield spreads wider and are also likely to keep the ECB patient and prudent in regards to monetary policy.
Those factors should help keep EUR/USD's topside limited.
Positioning will be another downside influence on EUR/USD.
CFTC stats show net EUR longs remain while retail accounts, which are typically contrarian, have increased their net-long EUR/USD positions during the pair's recent decline.
Until those positions flip to net-short EUR/USD's should struggle to rally.
Techs favor the downside still.
RSIs are biased down and not oversold and consolidation of long-term losses persists.
A break of 1.1450/1.1500 support is likely to see the long-term bear market resume and new lows set.
chart: Click here