Global macro overview for 05/12/2016:
Preliminary results of the referendum in Italy suggest that the constitutional amendments were rejected with the ratio of 59% -41%, which, according to the earlier declarations, should lead to the resignation of Prime Minister Matteo Renzi. This scenario was viewed as the most probable, however, the single European currency is still losing in value. Italy voted on the acceptance or rejection of the constitutional changes, through which the government of Prime Minister Renzi could enter the financial and economic reform, more or less expected by the European Union or the ECB. Nevertheless, it seems that Renzi lost this challenge as he admitted that he had failed and would resign. In conclusion, there are concerns the "No" vote could boost the prospects of opposition groups who are against keeping Italy in the Eurozone, but it is still too early to take this scenario as a certain thing.
Let's now take a look at the EUR/USD technical picture in the 4H time frame. The market continued to fall until the euro hit $1.0514, its lowest level since March 2015 and then it rebounded sharply. Currently, the market is trading above the technical resistance at the level of 1.0687 as it is slowly approaching the next technical resistance at the level of 1.0745. Please notice that the corrective cycle might extend even higher towards the level of 1.0800 and 1.0900.
