How To Trade The Greek Referendum

Reports From Exit Polls And The Latest Vote Counts Suggest A No Vote Is Certain. So what impact will a no vote have on the markets? Today’s open has already seen EUR/USD open below 1.1 with the Euro down against majors across the board.

Is The Euro At Risk?

The market did expect a no vote. The influential Greek government pushed for a no vote with an emotionally fuelled campaign. The Euro has remained highly resilient over the last few weeks after repeated failures in bailout talks. It is also seen as a safe haven currency alongside the Dollar and Yen. This makes for a tricky mixture.

There will no doubt be confidence in the Euro from investors. The ECB and EU Parliament won’t allow the Euro project to fail. Further to this most of the threat of a Greek default has been contained. Smaller EU economics like Ireland and Portugal are recovering and won’t follow Greek into an exit.

The Euro will be under pressure making for some interesting trading opportunities on retracements from sell offs. Is The Euro Going Down?

The Media are beating the drums of doom over Greece however the market has behaved quite the opposite. Just a few weeks ago the Euro was surging against the Dollar with bailout talks failing and some positive US data coming out.

How To Trade

It’s most likely that the Euro will remain in defined ranges until an absolute decision is made on Greece’s future. For now expect sharp falls down followed by retracements. Sharp rises up followed by retracements. Trade the ranges and don’t commit to a direction until a final decision is out.

What a No Vote Means

Greece doesn’t default on a no vote. It also doesn’t leave the EU. The talks will resume and the pressure will increase on both sides to come to an agreement. This vote is purely so that the Greek government has the backing of its people should it default, leave the EU and need a new currency.

A no vote has largely been priced into the market however no conclusive decision will come from it. The Greek government is expected to be back in Brussels to negotiate a deal 24 hours after the result.

Top Tip

Trade non Euro pairs. They will be a lot less volatile and present a lot less risk to you. If you do trade the Euro use patience and trade during peak liquidity during the UK/USA overlap.

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