A strong day for the euro across the complex, with the single currency shrugging off the result of the Italian referendum.
And for intra day trading, it's really been a case of watching your benchmark chart and tracking your faviourite euro pair higher. But it's been the eurjpy which is the stand out performer in the euro complex, moving in an impressive 400+ pip range, but which has triggered a volatility candle on the daily chart.
Eur/jpy reaction to the volatility has been a swift retreat to within the spread of the candle, and we need to see if the pair can maintain today's bullish momentum going into the Asian session. What is interesting is that today's price action reversed a handful of pips shy of the 3rd camarilla resistance level at 123.25, since when price has pulled back below the 2nd camarilla resistance at 122.55. The next major support comes in at 121.86 which sits in a price region eur/jpy sold off earlier this year.
As I explained in last week's webinar the camarilla levels on the daily eur/jpy chart will remain in place for the rest of December, and are a great way of giving my normal support & resistance a degree of hierarchy. Two levels to watch & which will help to determine direction for the pair.
And while writing, eur/usd has also posted a volatility candle on the daily chart. ... See MoreSee Less
Just to round off on politics, sigh of relief in Europe as far right Presidential candidate was defeated in Austria, but the real test for Europe will come with the French elections next year. Any sniff of a win for Marine Le Pen will really put the cat among the EU pigeons!
And, of course, Greece has never gone away - bailout deadline looms
Italy referendum pretty much delivered what was expected - Italians are notoriously conversative, but as David & I mentioned at last week's webinar the real fireworks will come if there is an election, which will focus on the euro. Italians are very much pro Europe - they just don't like the euro at the moment.
Meantime Brexit is back centre stage with the start of the Government's appeal against the High Court's decision requiring a Parliamentary vote before Brexit can be triggered.
All adding to December trading mix, a month that traditionally delivers some great technical moves, but that this year are likely to be even more volatile that usual.
And let's not forget the US election where Jill Stein & Hillary Clinton are trying to force recounts in various states. I believe it all has to settled before the 19th December after which the result stands. I think we will all need a break this Christmas!
Turnout for Italian referendum is supposed to be just under 60% which for Italy is high. Which side will benefit depends on demographics, and the degree to which Italians are fed up with the status quo. Generally, Italians very positive towards EU, but not the straight jacket of the euro. In the good old days whenever Italy needed to boost exports, Lira was devalued (another zero was added) & voila' we were all millionaires. At 2000 Lira to gbp it only took £500!
In a previous existence David & I were owed 7.5m Lira & we needed a wheelbarrow for the money!
Reaction, of course, will be in the euro complex, where we have some divergence in sentiment, with only eur/usd and eur/jpy closing modestly higher.