- Italy is in massive argument with EU, as it rejected Italy’s high spending budget twice
- As UK is preparing for Brexit and Italy is arguing with EU over its budget deficit, Euro is suffering heavily, currently residing at 1.1400 followed by a slight USD softening.
- There is chance of further decline, as more countries including Poland, Hungary, Sweden and Czech Republic are planning to follow UK’s lead
More countries Planning to leave EU after Brexit, leaving EU unprotected
Traders of EUR/USD pair are in grave danger as uncertainties are looming large over the Euro sentiment. Crucially, other countries are also planning to follow the UK’s lead and leave EU, especially if UK could secure a good Brexit term with Brussels.
The recent political drama over Italian budget and Brexit issues have already put Euro in enormous pressure, as it has been trading in a tight range between 1.1350-1.1450. However, a further decline below 1.1250 region might have been upcoming, as more countries are planning to leave EU or Eurozone, despite Italy’s vague promise of not leaving EU or Euro zone. Unlike the UK, as Italy is an influential member of Euro zone, any debate regarding the existence of Italy in EU or Euro zone could ramify EURO intensely. None the less, Euro has been falling against USD since mid-April, 2018.
EUR/USD daily price chart
Poland is arguing with EU regarding a controversial reform of its judiciary policy and a recent voting poll in Poland indicated that the majority of Cabinet members would like to leave EU. Additionally, as already EU had labeled the Hungarian PM a “systemic threat to the law”, Hungary might leave EU as well. More crucially, anti-EU sentiments have been rising in the parliaments of Sweden, Estonia and Czech Republic, needless to mention the Greece situation, as it is drowned in debts.
Carefully considering the current Euro situation, it appears that precautions should be taken while being in a buying position for EUR/USD pair, as further political turnovers might have been upcoming after UK-EU Brexit deal. If UK could reach a salubrious Brexit deal with EU, more countries might leave EU, potentially endangering the Euro positioning.
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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]