Short EURUSD on continued Spanish upheaval

Medium Term / Sell

Steen Jakobsen

Chief Economist & CIO

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.

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.

Parameters:

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

-- Edited by

Michael McKenna

Enlarge
Source: Bloomberg
Enlarge
Source: Bloomberg

You can access both of our platforms from a single Saxo account.

A compiled overview of Trade Views provided on Home.saxo can be found here (https://www.home.saxo/insights/news-and-research/trade-views/report).

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
- 沪ICP备13028953号-1 (http://www.miitbeian.gov.cn)