EUR/USD is marginally higher on the day, but still bearish - Scotiabank

With eyes on Italy still, analysts at Scotiabank also explained that Germany’s ZEW Survey reflected a small rebound in investor optimism this month, with the expectations component rising to -24.1, from -24.7 in Oct. 

Key Quotes:

"Markets had expected a weaker result so the rebound is a minor plus. But the gauge remains soft and reflects concerns that the economy will struggle to rebound from its soft patch any time soon."

"EURUSD weakened Monday on renewed concern over the Italian budget situation amid signs that the government in Rome will not alter budget plans. Italy is due to report back to the EU, which objects to the plans, by midnight tonight"

"Italy may make some minor concessions on some of the numbers but the saga looks poised to run on for now."

EURUSD short-term technicals - bearish:

"EUR/USD is marginally higher on the day but yesterday’s loss of key support at 1.1300/05 was quite decisive and followed two days of relatively heavy losses previously."

"The bounce in the EUR so far today looks relatively weak and consolidative, rather than corrective and, absent a quick recovery back above the 1.1300 support zone (200-week MA at 1.1311), the technical outlook for the EUR will soften further."