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Market Analysis

How Do I Trade EURUSD If Italy Leaves the EU?

February 12, 2019
BY Emma Richards

Brexit cracked the European Union, and the financial world now watches in anticipation of the domino effect. We’ve all seen what happened to Sterling after the EU exit was announced, and now “Italy leaving EU” is hitting the headlines. Traders are now asking “how do I trade EURUSD if Italy leaves the EU?” Let’s look at the 2019 forecast and how forex traders can take advantage of an Italian Exit.


Did you know, forex traders can benefit from financial instability?


Italy leaves the EU

After a prolonged period of frustrating negotiations over the Italian budget for 2019, Italian prime minister Giuseppe Conte might finally announce that the government has had enough. Italy leaving would shake the Union to the core. European financial markets would be sent off the cliff. The EURUSD exchange rate could likely nosedive by more than 10% in a single day.


Italian debt rocks the banks

In Italy, uncertainty would spread amongst everyday people and business owners alike. The entire nation would question what might happen to all the euro bank accounts once Italy moves back to the lira. Would the government take this opportunity to confiscate some wealth through creative conversion rules? Such fears would set the stage for a run on the banks as people hurry to move their euros to a mattress stash.

How do I trade EURUSD if Italy leaves the EU?

Banks will see an avalanche of Euro withdrawals if Italy leaves the EU, creating economic chaos and further weakening the EURUSD.

Even though the Italian economy has been running on low steam for years, even seeing negative growth at times, it’s still the third largest in the eurozone. The impact of Italy’s departure from the eurozone would be felt all over Europe and Euro sentiment would likely reach rock bottom by the summer.


Euro blowout

EURUSD would hit a long-term sell-off trend. For months the uncertainty would have analysts trying to understand exactly how leaving the eurozone will affect the currency pair. By Q3, the euro could go down by as much as 30% against the dollar. This is based on Italy’s economic contributions to the EU compared with the UK. Negotiations for an exit deal, as expected, will likely go well into Q4 of 2019. Euro buyers would be in for a rough year.


How to trade EURUSD if Italy leaves the EU

Italy leaving the EU in 2019 is a pretty outlandish prediction. But this is what everybody said about Brexit as well. We’ve already seen what happened to the markets when the UK dropped the Brexit bomb. Answering “How do I trade EURUSD if Italy leaves the EU?” is quite simple. If Brexit is anything to go by, then you can expect EURUSD to go down fast. “SELL” will probably be the order of the day and perhaps the order of the whole year. The harder question will be how high to set your take profit. Sell orders can also protect your personal savings from rapid currency depreciation. With political uncertainty growing steadily in the EU since the Brexit vote, who knows when it could happen, but what was last year a worst case scenario is fast becoming a looming threat to the Euro.


Be ready for 2019 and consider protecting your savings with a hedging order.


Your 4-step guide to opening a trading account


Step 1: Getting registered

It’s very easy to open an account with Exness. Click here to open the sign-up page in a new tab. If you want to get everything done in the next 10 minutes, be sure to have a credit card, ID, and, proof of address by your side. You can choose to open a demo account without these things. Either way, everything you need to know is here in this two-minute video. Pause the movie as you go through the first three steps.

Tip: Account type depends on the amount you wish to deposit. Leverage is effectively an interest-free loan that the broker offers. It allows you to make a large investment from a small deposit. If you are looking for high profit with high risk, a higher leverage might be right for you. If you prefer slow-burning safety with lower results, then keep your leverage low. You can never lose more than you have, but higher leverage means faster results… both good and bad.

Step 2: Prove who you are

Exness takes security very seriously, and they check every client signing up. Just like opening a bank account, you’ll need to prove who you are before getting access to the global markets. Watch this one-minute video to see how.

Tip: While you’re waiting for your real account to be approved, open up a demo account and start getting to know the trading platform.


Step 3: how to get access to the market

Trades are made using the award-winning MT4 trading platform. Inside the box of the demo or real account you’ll see a gear cog. Click the gear cog to make a deposit. Use the passwords provided in the email. Click the gear cog again and select SIGN IN TO MT4 WEBTERMINAL then follow this one-minute video. You’re about to make your first virtual trade on the real markets.


Step 4: making a trade

As a default, the top currency pair on the list will have an open chart. Right click on the chart and select the “close” option.

As a professional trader, selecting the right pair requires some research. For a first-time test, any pair will be sufficient. Drag a pair from the list of currencies on the left side of the trading terminal. The old saying goes, “what goes up, must come down.” Obviously, this principle goes the other way too. Your mission is to find a moment when the price direction is going to swing or reverse. If you feel the price is about to go up (bullish), then BUY, if it looks like it’s been trading high and the price has started a downward (bearish) trend, then SELL.

Open a trade

There are many ways to open your trade. You can select from the buy and sell options on the top left of the chart. Preferably, double-click the currency pair on the list. Right click on the chart when you’re ready to make your first trade. Time to set the volume depending on how confident you are in the direction you are forecasting. This is the perfect time to set your stop loss and take profit. Click the arrow to the right of the stop loss and take profit prices.

Note how the blue and dark red lines in the popup graph sit above and below the buy(ask) and sell(bid) price. In the example, we traded long (buy) and got a message confirming the order was successful. If you get an error, your volume was too high for your balance, or your stop loss/take profit was too close to the spread. Remember, every order starts as a negative because of the spread. Be patient. Your take profit will activate when the time is right, and your stop loss is protecting you. To close an order, you have three options. Click the X on the right or right-click the order. If you double click the order, you can close or modify the order.


You now know how to make a trade. Forex trading can be an exciting way to spend your free time, and you’ll actually learn some real-world skills that will serve you well throughout your lifetime. Be patient, learn, and who knows, you might one day be one of the lucky few full-time traders. How will you spend your day?


Didn’t start yet?


This article is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience, or current financial situation.
This article is not prepared in accordance with legal requirements promoting independent investment research, and Exness is not subject to any prohibition on dealing before the release of the article. Readers should consider the possibility that they may incur losses. Therefore, Exness is not liable for any losses incurred due to the use of its articles. Please note that past performance of an asset is not a reliable indicator of future results.

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