News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Wall Street
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here:
  • RT @Stephanie_Link: 84% of $SPX companies have beaten EPS estimates to date for Q3, which is tied for the 3rd highest percentage since 2008…
  • What is #NFP and how can you trade it? Find out:
  • What does it mean when one candle fully engulfs the previous in its price action? The bullish engulfing candle is one of the forex market?€?s most clear-cut price action signals. Figure out how to identify this pattern here:
  • Oil maintains a medium-term bullish outlook, but its overbought condition and price's proximity to key technical resistance may pave the way for a brief pullback before the next leg higher. Get your weekly oil forecast from @DColmanFX here:
  • It seems the markets are riding high, but risk is always lurking around the corner. Consider your escape plan before you find yourself in collapsing market. What are the top havens for different conditions in 2020? Find out from @JohnKicklighter here:
  • The update to the US GDP report may keep the Greenback under pressure as signs of a slowing recovery undermines speculation for an imminent shift in Fed policy. Get your weekly USD forecast from @DavidJSong here:
  • There a many different trading styles that can be applied to trading forex. Learn about different types of traders here:
  • Hang Seng Tech Index has likely formed a bullish “Inverse Head and Shoulders” chart pattern. Immediate support and resistance levels can be found at 5,800 and 7,433 respectively. Breaching above 7,433 would likely bring 8,266 into focus.
  • The Nasdaq 100 index has likely formed a bullish “Butterfly” chart pattern, which hints at further gains. The MACD indicator is about to form a bearish crossover, suggesting that upward momentum may be weakening and thus vulnerable to a short-term pullback.
Euro Rallying as Italian Referendum Dashes MS5 Hopes

Euro Rallying as Italian Referendum Dashes MS5 Hopes

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- EUR/USD dropped around -1.5% around the initial referendum results as anticipated, but markets have been quick to perk up.

- Implications for Italian electoral law may have made the Euro safer from an "Italeave."

- DXY Index weighed heavily by EUR/USD turnaround; US ISM Services/Non-Manufacturing due later today.

Even as the UK Supreme Court Brexit hearings get underway in London, the market remains focused on Rome. The resounding defeat by a margin of either 59-41 or 60-40 (votes are still being tallied) was a strong enough signal to provoke Italian Prime Minister Matteo Renzi to resign following yesterday's Italian constitutional referendum.

While the Euro sold off around -1.5% across the board initially as anticipated, the ramifications of the vote are only now being digested, which are, somewhat perversely, contributing to the Euro's sharp turnaround this morning. As I wrote in the Euro weekly trading forecast ahead of the Italian referendum, "Even in the event of Renzi resigning and with new elections resulting, political gridlock would remain, preventing any significant reform – including legislation to take Italy out of the Euro, if say the Five Star Movement came to power in the next elections."

In effect, the results of the Italian referendum may have made the Euro safer from an "Italeave" (or "Quitaly," or "Exitaly," or whatever terrible euphemism you'd like!) due to the implications for Italian electoral law. That is to say, Italy doesn't have an electoral law at the moment by which a Euroskeptic party to come to power and provoke an "Italeave." This is because the recently rejected constitutional referendum was one of two parts to reforming the Italian legislature.

Part one of the reform, the Italicum, agreed upon over the summer, would reform the Chamber of Deputies (the Italian House of Representatives or Parliament, for those reading in the US or UK) to allow a 'first past the post' winner, the post being 40%, and the winner receiving an allotment of 340 seats (out of a possible 618) automatically. This would give the winning party a clear majority and the runway to enact sweeping legislative reform. Not any longer, it would appear.

The Italicum was agreed upon in this form when Italian PM Renzi's Democratic Party appeared to be far enough ahead in the polls to ward off the Five Star Movement's (MS5 Party) advance; yet this electoral apparatus, if had been implemented, would have paved a clear path for the MS5 Party to gain control of the government via a majority in the Chamber of Deputies.

Instead, now that the constitutional referendum was shot down (the second of the two parts reforming the legislature; this was aimed at the Senate), the Italicum's proposed reform is not going to be implemented. Instead, because Italy now lacks electoral law, the Italicum will need to be renegotiated. It seems highly likely that the old system - one of proportional representation that has contributed to Italy's 63 governments since the end of WWII - will stay as a countermeasure to the rising tide of economic populism in Europe.

While the old system of proportional representation may mean gridlock will continue, it also means that governments will continue to need to be formed by coalitions. This may be the case in the next election, where no single party has a majority in popularity polls at present time; the MS5 may very-well achieve a plurality, but given its stance on leaving the EU whilst refusing to form a coalition with other parties means that the MS5 Party may never actually see one of its members become Italian prime minister.

Looking at the big picture, it's clear that the Five Start Movement won the battle to get Italian PM Renzi out of power. But in doing so, it may have lost the war to achieve ultimate power itself, closing off a pathway for it to take Italy out of the Euro and the European Union.

See the above video for a technical review of the DXY Index, EUR/USD, GBP/USD, AUD/USD, USD/JPY, EUR/GBP, EUR/JPY, and GBP/JPY.

Read more: EUR/USD Set for Volatility with Italian Referendum, ECB Rate Decision in Sight

--- Written by Christopher Vecchio, Senior Currency Strategist

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.