EURUSD Euro Weekly Chart; Italy Rejects Reforms Voting No on Referendum; Downward-Sloping Channel; Oversold; Positive Divergence Setting Up

Italy rejects reforms voting no on the referendum. Italians prefer to keep the status quo;  a bloated slow bureaucracy that is unable to institute reforms to help the sick economy. Have another glass of wine and relax; it is the Italian way.

Renzi speaks minutes ago, at 6:20 PM EST Sunday evening, 12/4/16. It is just after midnight in Rome, Italy, Monday morning. Renzi concedes the referendum vote and resigns. The drama will continue today as to what the next step is for Italy.

The euro drops like a stone to 1.0510, now at 1.0550, at levels not seen since March 2015 and at record-breaking lows. The euro drops so the dollar pops. USD 10.44. A stronger US dollar sends commodities lower including oil. US futures are soggy. S&P -8. Dow -40. Nasdaq -25.

The dark green lines and circle show where the euro is slipping, however, the indicators are set up with positive divergence. Stochastics are overbot. These are bullish indications for the euro. Since it is a weekly chart, and the Italy referendum news is only getting priced into the euro chart now, a few days or week or two of weakness may persist. The ECB meeting is on Thursday so an extension of QE will create further euro weakness. However, the euro may be a long play say in a week or two and bounce from the possie d on the weekly basis. But there is no rush to trade the euro especially with the ECB on tap this week but place it on the radar as a potential long side trade maybe starting in a couple weeks.

Price may want to test that bottom rail of the downward-sloping channel and bounce from there, call it the 1.03-1.05 area. Price is overextended to the downside far under the moving averages so a mean reversion higher is desperately needed which is another bullish indication setting up. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.