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EUR/USD is trading slightly higher in the well-known range at 1.1770, It is some 30 pips above the levels seen earlier in the day. Resistance awaits at 1.1790 and support is at 1.1685, the extremes seen in recent days.

Is this the calm before the storm? Markets are not pricing in a deterioration in the crisis in Catalonia, Spain’s rich northeastern region. The fourth-largest economy in the euro-zone is suffering the worst crisis in decades and the world is watching.

Tension is mounting towards the all-important speech by Catalonia’s President Carles Puigdemont. He will address parliament at around 16:00 GMT and may declare independence. While such a declaration does not have any immediate implications, it will undoubtedly deepen the political situation. The Spanish government will likely respond by suspending the autonomy (Article 155) and the country will enter unchartered waters. Puigdemont may also opt for other routes.

See our preview:  Catalan crisis: the good, bad and ugly scenarios for Puigdemont’s speech

What about market movements? So far, movements have been muted. After the October 1st referendum, EUR/USD opened slightly lower but quickly closed the gap. Other forces such as comments from the ECB, US economic indicators, and other events had a bigger effect.

But if things go haywire when it is not priced in, the euro could crash.