EUR/USD tests weekly 1.05 bottom after no vote in Italian referendum 2016.12.05

EUR/USD

4 hour

The proposed Constitutional amendment vote in Italy was rejected in a referendum on Sunday 4 December. The no vote won by a clear majority and took nearly 60% of the votes. The EUR/USD reacted with bearishness to the news and fell back to the daily-weekly support zone (green lines).

1 hour

The support Fibonacci levels are key break or bounce spots. A break below the 138.2% Fibonacci level of wave X (brown) invalidates the correction and indicates a continuation of the downtrend (wave 5 blue 4 hour chart). A bounce at support could, however, see price expand the correction of wave 2 (green).

DAX30

4 hour

The German DAX index is showing a retracement towards the Fibonacci levels of wave 2 (brown). Price has bounced at the 50% Fib but a deeper pullback could occur to lower Fib levels if the rally fails to break above resistance (red/orange). The Fibonacci levels of wave 2 vs 1 should act as a support but a break below the 100% level invalidates wave 2 (brown). A break above the resistance (orange/red) could trigger a potential wave 3 (orange).

1 hour

If price fails to break above the Fibonacci levels of wave B vs A then a larger bearish ABC zigzag (purple) could take place.

USD/JPY

4 hour

The USD/JPY uptrend is pausing and showing a larger correction with a wave 4 (blue). A break above resistance (red) could see price continue higher towards the Fib targets of wave 5 (blue).

1 hour

The USD/JPY seems to have expanded the retracement within wave 4 (blue) via a WXY (brown) correction. A break below support (green) could price extend the wave 4 (blue) to a lower point.

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