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EURUSD Longterm Forecast: Italy crisis at the door.

EURUSD Longterm Forecast: Italy crisis at the door.

“I am truly convinced that Italy would solve most of its problems if it had its own currency”

This sentence belongs to Claudio Borghi, President of the Parliamentary Committee  in Italy.

The Italian government is creating further turmoil in financial markets on Tuesday morning, after new comments that Rome would be better outside of the eurozone.

I will not focus on the macroeconomic figures of Eurozone. More important problems are about to knock on the Union’s door.

Borghi’s statement in a radio program in October 2018 began to gain importance as Italy entered a new recession.

The fourth quarter growth data showed that the country entered a new recession after 2008, 2011 and 2012.

GDP 4th Quarter Expected (-) 0.2% vs Market Expectations (-) 0.1%

Annual Expected 0.1% vs Market Expectation 0.3%

Even though the outlook of Italy’s economy was beak before the transition to the Euro, now it is obvious that the things getting harder with Euro.

Possible scenarios: Going on default, bankruptcy, going out of Eurozone

Germany slows down, the Brexit uncertainty continues,  new problems with Italy… Now markets think twice about ECB’s normalisation policy in 2019.

And today we saw another divergence:  Venezuela Crisis

Italian government split over Venezuela crisis
5Star Movement and far-right League at loggerheads over strongman Nicolás Maduro.

Germany and the United Kingdom joined the supporters of Guido, while the ranks became more frequent and Italy supported Maduro.

EC president Antonio Tajani says Italy has blocked the European Union’s recognition of Venezuelan opposition leader Juan Guaido as the interim president of the country

The economies of the member countries appearing in the big picture, the ECB policies, a new wind of political uncertainty in the EU after the Brexit is blowing.

Despite the FED, which hovered at 180 degrees in 6 weeks on the US side, questioning its credibility, the Dollar is still attractive due to its high real interest rate compared to the Euro.

We can list many negative things for the USD but I can list much more negative things for the Euro.

1.13000 support… USD bulls will come back to the game at the breakout of 1.13000.

There is still no strong reason to buy a currency that is open to a lot of political and economic uncertainty.

As long as there is no closing  above 1.1520 in short term and 1.18200 in the medium term my targets will be:

1:13

1.1220

and 1.10600

All pullbacks could be used as a selling opportunity for longterm purposes.

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EURUSD: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility

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