The Hornets currently boast a 100 per cent record this season.
Gracia told AS: "It was the biggest deal in the club's history. Logically, as the coach and as someone in charge of the day-to-day issues, my obligation is to make my opinion known and say what I think the team needs.
"But then there is another part, as in every club, whether you're manager or not, when there are factors determined by the financial side."
Asked for a target this season, Gracia was realistic.
He added: "It was the same when I came here: we have to make sure Watford are competetive in the Premier League, and are consistent every year and gradually aspire to achieve more."