Old Teflon bounces back after Renzi defeat
After h Asia plop following the result of the referendum, EURUSD has bounced right back to around Friday's closing levels.
EURUSD H1 chart
The bounce back shouldn't be a surprise, given the result was expected. Confirmation of the result and then the following news that Renzi was resigning, had the expected kneejerk reaction. The magnitude of the move was probably aided by the time it all happened, in thinner Asian liquidity.
What we have now is further evidence of the possible strength of the 1.05 level. Going forward, Italy in political turmoil isn't anything new, so the market seems to be shrugging its shoulders right now. The situation will play out over the coming days and will no doubt be resolved eventually. We managed to survive Spain not having a government for months so Italy shouldn't be too bad either. Spain's economy even did better when there was no one at the helm so it could be a positive. Time will tell.
For now, as I type, We've just broken 1.0700. The next main resistance on a full break is up at 1.0745/55. Support is likely building at 1.0670 and 1.0620.
