On Sunday the citizens of Greece will hold a historic vote that will forever change the fate of their place in Europe. I wont get into the details of what they are voting on. If you are reading this blog and are a trader you probably already know. I will go over a very simplified version of what each vote could mean and how best to trade it.
A no vote will likely create a negative bias on the Eur and increase risk aversion flows going into the JPY. The biggest mover would likely be a EURJPY short. We would definitely be in a “Risk Off” Market.
I would prefer a yes vote as it would likely provide a temporary rally on the Eur providing for opportunities to short it as it remains one of the weaker currencies and I believe any rallies would be short lived. This would also have the best impact to support a Fed rate hike which would support the dollar. The trade here would be selling any EURUSD rallies. This would facilitate a more “Risk On” market.
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