EUR/USD: will the Spain's political climate accelerate the euro's decline this week?

EUR/USD is currently trading at 1.1780 with  high of 1.1815 and a low of 1.1779

In a quiet start to the Asian week with holiday's in China and Australia, we are not seeing much price action in the FX space, but the euro has dipped again below the 1.18 handle after today's shocking events in Spain where the Catalan vote for a referendum was disrupted with violence by the National Police, instructed by the Spanish government that argues the vote was illegal. 

90% Of Catalans voted "Yes" To leave Spain – RTRS

Catalan holds 20% of Spains GDP and the outcome could be a catastrophic fundamental event for markets and equally, it could accelerate the euro's decline. The reaction so far has been relatively muted in the market but the political fall-out is surely a weight for the euro in the near and medium term and something that the ECB will be watching very closely. 

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EUR/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that the pair managed to correct half of its weekly losses, with the 50% retracement of the decline at 1.1825, converging with the mentioned lows. "In the 4 hours chart, the pair presents an upward potential yet to be confirmed, as the price recovered above a now flat 20 SMA, the RSI indicator holds directionless around its mid-line, and the Momentum indicator aims north near overbought levels."