How to Trade EU Summit Gloom
The upcoming European Summit is weighing on the euro, and this strategist has a plan to play the sour mood.
Ready for the European Union leaders' summit? Excited? I didn't think so.
There is "general skepticism we will get anything concrete that will solve the actual problems" in the euro zone, says George Davis of RBC Capital Markets. And that is bad news for the euro, he told CNBC's Scott Wapner. "In terms of the bias towards the euro, I think risks are tilted towards the downside."
So Davis recommends building a short euro position by scaling into rallies and selling the currency. He wants to enter a short euro trade at 1.2550, setting a stop at 1.2675 and a target at 1.2250.
"We're setting ourselves up for a little bit of disappointment out of the summit, and I think that's the best way to play the euro right now," Davis says.
You can watch the discussion on the video clip.
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