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EU Summits Can’t Fix Euro Problems
Written by: PaxForex analytics dept - Thursday, 18 October 2018 0 comments
The European Union is great at one thing: holding summits. Brussels has the ability to negotiate any topic into the ground without ever reaching an agreement. The EU is now at it again. The fact that the EU functions on unanimous votes, which means all members have to agree, renders the entire institution useless. The idea is to show solidarity, but in reality the EU lacks this. It is almost impossible to get 28 different countries with different needs and backgrounds to agree on key topics. One solution doesn’t fit all European countries and creates great imbalances.
Germany and France seek to force their will on the rest of the EU, but member countries have had enough and are standing up. Hungary, Poland and the Czech Republic on the periphery and Italy inside the Eurozone. The UK has voted to leave the EU altogether which should be seen as a warning sign that despite the love of summits, there are grave issues at the very core of the EU. Next May’s election may sweep in a new direction with populist lawmakers replacing dysfunctional ideas favored by the likes of Juncker, Tusk, Moscovici, Merkel and Macron.
Brexit may actually take a back seat despite another deadline approaching which is likely to pass without an agreement. Security, especially cyber security, will be one key topic for EU members to discuss. Issues from the 2015 refugee crisis have not been addressed and the asylum system remains a mess while migration control agreements remain absent. Climate issues have been addressed for the most part by verbal agreements and written statements, without actions taken.
Poland is currently questioning EU law and if it violates the Polish constitution. The issue is if EU law supersedes Polish law and this applies to every other member as well. The 2009 Lisbon Treaty allowed local judges to ask the European Court of Justice for assistance and bypass local law. Also in 2009, Germany’s top court stated that the German Constitution superseded EU laws. In other words Germany first, EU second. Poland wants, rightfully so, the same treatment. There is a big divide behind the handshakes in public across the EU and EU Summits can’t fix Euro problems, but here are three forex trades to fix your profits!
ascending support level which led it into its next horizontal resistance level. This currency pair is now on its way down again, but expected to reverse once again off of its primary ascending support level. Forex traders are therefore advised to buy the dips from current levels.
Give this week’s EU summits, the EURGBP may benefit as more rhetoric will emerge in regards to Brexit. Price action just pushed above its horizontal support area and is now faced with is primary descending resistance level, closely followed by its secondary ascending support level. A double breakout will take this currency back into its next horizontal resistance level. Forex traders should by the dips in the EURGBP before the double breakout occurs.
Following a breakout above its horizontal support area as well as above its primary descending resistance level, the EURCHF advanced amid a combination of profit taking and weaker fundamentals out of Switzerland. Price action approached its next horizontal resistance level which was enforced by its secondary descending resistance level and is now driving the EURCHF to the downside. Forex traders are advised to sell the rallies from current levels.