TheBanker
Short

Trading the Italian Referendum, do we have a major crisis?

FX:EURUSD   Euro / U.S. Dollar
Happy weekend traders, what an end to the year we have on our hands.. as most of you know already I have been screaming parity for some time!

I think that FX markets are not too complacent about the referendum. Italy's complicated politics mean a "No" vote (which is expected) doesn't necessarily follow through to the 5-star movement coming into power. The impact of a "No" would likely have a EUR moderate negative outcome. The Renzi government will likely come under pressure as fears of a fall grow rapidly.

I recommend fading EURUSD allies on a surprise "Yes" vote and selling nearer the 1.08 area. A "No" vote will cause moderate weakness but trading EUR short at these levels is not something I am a fan of.

If the public rejects the reform as expected the euro will come under increased downwar pressure, the cyclical low of 1.0458 from March '15 may will open the gates to a potential test of parity before the year end. Market participants will be concerned that snap elections could be held given the antiestablishment and Eurosceptic performance in national polls.

It would not surprise me if we briefly climb back toward the 1.088 level although upward momentum is unlikely to be sustained for long.

You can see my previous ideas to see my very own euro-scepticism, all european banks are in trouble.. the difference between the U.S and E.U is the reserves on centralised debt. Essentially as Greece goes down, Portugal Italy etc you are talking about undermining the reserves of the European central banking system as a whole. Banks that were not even into derivatives are getting smoked. Leaving everyone with their own debt has really been the achilles heel of the whole EZ.

I have linked my previous eurusd ideas to show that I have been advocating the collapse of the euro since my time here on tradingview.

All the best guys and GL.


** DISCLAIMER: THIS IS MY PERSONAL VIEW AND NOT INVESTMENT ADVICE **

Dec 08
Comment: 1.08298 entry
Dec 08
Comment: congratulations to those who took this, rallies will be sold moving forward
Dec 10
Comment: important weekly close below 1.0556
Dec 20
Comment: on the right path
Dec 21
Comment: weekly close below 1.0465 is needed to deepen the correction
Mar 12
Comment: start covering if you have not already, huge upside in euro has been unlocked! I have changed outlook from neutral to buy

Related Ideas

2 Options now 1.0860 critical

Reply
Dude did you go to ninja school. Insane entry. It's on like donkey kong.
Reply
What do you fink about this count?
2016-05-03 - 0
2016-06-24 - A
2016-11-09 - B
2016-11-24 - 1(C)
2016-12-08 - 2(C)
Now close to end 3(C)

How did you determine Sell Limit7?
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Okay, boss. I'm in.
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Thank you very much my friend!!!
+2 Reply
Which level do you think this pair will reach for retracment because i have shorts from 1.08 and im not sure to keep or close and open again
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yu are the best
+1 Reply
TheBanker ali_12345
@ali_12345, thank you for your kind words
Reply
Interesting view!

Do you think we should move our money to Swiss banks (Not because of secrecy, because of their strength)?

What about British banks, do you think they are as vulnerable as the rest in the EU?

Thanks
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I thinking higher
+1 Reply
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