Austria’s Constitutional court has ordered that the May’s presidential election be completely annulled. A new election must be held because of “particularly serious cases” of voting fraud that was detected in the vote. If the election is not rigged, then we may have another country seek to exit the EU or give them a good scare.  There are some currents moving under the surface in the EU. The German Finance Minister Mr Schäuble really wants a treaty between the EU and the UK covering trading rules and other regulations that would restrict Britain from gaining access to the EU’s internal market. His hard-line approach is designed to deter other European countries from leaving the EU. His view, according to sources, he wants to punish Britain to ensure there are no incentives for other member states when renegotiating relations.

However, Mr Schauble also wants to use BREXIT to begin a reform process in the EU for he wants to change the structure for Germany. He too wants to eliminate the EU Commission and introduce a new structure that would then oversee debts, stability and growth of all members and would have greater control to step-in and reject member states’ budget plans. In reality, he was direct control, however, he seems to also want Germany to have some sort of final say on the financial plans of all countries within the Eurozone.

The future remains very much up in the air. The Constitutional Court overturning the Austrian Election may change the game.

QUESTION: There are now stories appearing about this nine-page document calling it and ultimatum for a superstate. But they are not publishing the document. Since you may have been first to report this, do you have the document?

ANSWER: Yes. Please note. This is a radical proposal that sees the “European Project” (EU) with one government and the annihilation of individual state identity as the end goal from the very outset.

This is not some conspiracy theory. As far back as 1990, Margaret Thatcher opposed the euro project because she KNEW that was just the start and that the end goal has always been to federalize Europe into this single “superstate” people are now finally starting to call it.

This is a major UNCERTAINTY which lies ahead. It is the EU government becoming desperate that their dream will be lost. They cannot understand that the very path they have chosen is hell bent upon creating European Civil War by attempting to force this one government fits all ideal.

We can see that the green uptrend line has been penetrated previously on this decline. Nevertheless, the euro is unable to rally beyond that 116 level where it elected the Yearly Bearish Reversal at year-end. So people have been impatient and always expect instantaneous moves despite the fact we warned the euro had to go back to retest the 116 level since it closed 2015 at 10869. We saw that rally but it was like watching paint dry. The markets have been extending this crisis because we are dealing with a very critical long-term event which may result in economy chaos globally by 2018. The retest of the 116 level stopped at 11616 during the week of May 2nd, which was 23 weeks from the lowest close the week of November 23rd, 2015. From this May high, the euro has elected two Weekly Bearish Reversals and now we have 10790 and 10705, You will see this is tends to be supported technically for that uptrend line lies at 10750. There is some additional technical support at the 10600 area. Nonetheless, we also have a Monthly Bearish at 10710. From a technical perspective, a closing below the May low of 11098 will be very bearish. AT the time of this posting, the euro is trading at 11104.

For all the yelling and finger pointing at the Brits and the politicians say look at the pound and that proves the “leave” camp was wrong, what they fail to grasp here is because Britain has its own currency, the pressure is funneled into the pound whereas the crisis takes shape in Europe by causing the peripheral bonds to decline and rates to rise in the open market. True, we have a Weekly Bearish Reversal at 13228. On the monthly level, all Bullish Reversals are above the 150 level. Our Monthly Bearish to watch is 13660 and with the pound trading at the time of this post at 13431, this remains a key resistance point. The pound did penetrated the 2009 low of 13508. Despite that 2009 collapse, the Monthly Bearish was 13680 back then which held confirming the temporary low was in place. This means we have 13660 and 13680 coming into play today. Indeed, the 13680 is also a Quarterly Bearish along with 13970. Therefore, if these are elected today, this means long-term we are looking at a retest of the 1985 low which many people though just a few months ago was a totally crazy forecast.

Nevertheless, a pound closing today below 13660 will warn that the long-term is in motion. We should see the retest of the 1985 level near par and slightly break it as soon as 2018. Even the oscillator on the quarterly level has plenty of room for such a decline.