The Italian PM, Matteo Renzi has been heavily defeated in the referendum to change Italy’s constitution and has announced his resignation, marking a major victory for anti-establishment and right-wing parties and placing the EU into political chaos ahead of the swathe of EU elections, including those of France, Germany and Holland, due in 2017.
The Euro has already made a new trend low of 1.0504 early on Monday in Asia, trading at levels last seen in 2003 and taking out the previous 1.0517, 24 November low, and looks to have plenty more in it once Europe get in. Although the Euro has currently bounced, to trade at 1.0560, a move back to 1.0500 would not surprise, below which would see good bids at the 1.0460, March 2015 lows but under there, there is then very little support really until we reach almost to parity (1.0070=(76.4% of 0.8225(Oct 2000 low)/1.6037(July 2008 high)). On the topside, resistance will be seen at 1.0600, and again Friday’s high of 1.0689 although this looks very doubtful. With Europe not having had a chance to get on board this trade, Asia seems to have a time advantage, and although the Euro may squeeze back to 1.0600 ahead of European traders arriving for work on Monday morning, I suspect it is a decent sell at anywhere around these levels.
|24 Hour:||Medium Term:|
|1.0745||17 Nov high||1.0504||Session low|
|1.0703/10||(23.6% of 1.1282/1.0517) /17 Nov high||1.0462||March 2015 low|
|1.0685/89||28 Nov high/2 Dec high||1.0400||Minor|
|1.0660||Session high||1.0335||2 Jan 2003 low|
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