EURUSD Slumps Following Catalonia Referendum News

Recent Catalonia Referendum highlights had put pressure on the EURUSD right from the beginning of the week. Latest official reports point towards a staggering 90% of the votes in favor of the Independence, which had raised concerns among investors.

Political crisis lies ahead for Spain

Since the results point towards a split, the central government from Madrid will face tough negotiations in the near future, as the Catalonia people seem to be in favor of the break. Yesterday clash between the voters and police troops, which had been sent to stop the voting process, had aggravated the situation and now the people are more willing to step forward towards independence.

EURUSD slumps 80 pips due to Catalonia Referendum Concerns

Looking at our chart above, you can see the performance of the EURUSD since the opening of this week. The price had gapped down by 10 pips at the open and after the gap was filled, the downside continued, with the pair losing around 80 pips, top tick to bottom tick.

So far, the price managed to consolidate for 5 hours, but since the latest news from Spain point towards though negotiations between the Madrid central government and Catalonia officials, the euro could be under pressure against all majors.

Looking at this point, it seems like last week low would be under sellers’ pressure shortly and if the news won’t be positive, with an independence materializing, we could see the euro losing more ground.

The current price action structure does not show that the buyers had regained control over the order flow, so traders will be looking to rejoin the already established bearish trend. By checking the daily news video you could find more details about the subject.

To sum up, as the political situation from Spain is far from being over, the euro could continue to be under pressure as long as more negative news will continue to come out to the market.

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