Short EURUSD on continued Spanish upheaval

Short EURUSD on continued Spanish upheaval

Trade View
Medium Term / Sell
Picture of Steen Jakobsen
Steen Jakobsen

Chief Investment Officer

Instrument: EURUSD
Price Target: 1.1450
Market Price: 1.1665

Background:

As highlighted this morning, there is some “rain in Spain”. First, Zidane resigns, and now prime minister Rajoy looks to be 'former PM Rajoy' by tomorrow night.

As it happens, I just had a chat with a journalist in Spain. The takeaway surrounding the country's preparing for a Friday vote of No Confidence in prime minister Mariano Rajoy's government?

   • This is bad; it creates more uncertainty.
   • If the motion caries it will be the first time in Spanish history that a sitting government falls on a vote.
   • The Socialists will form government; they have bizarrely decided to “keep” the Conservative budget if they oust Rajoy.

Parameters:

Entry: 1.1665
Stop: 1.1750
Target: 1.1450
Time Horizon: medium term.

EURUSD
Source: Bloomberg
EURUSD
Source: Bloomberg
Management And Risk Description:

The vote is tomorrow, and the market remains relatively muted for now. The event risk is the actual vote... but the likelihood is that EURUSD sells off.

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