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Market participants have already shrugged off yet another EU Summit fiasco, after two days of debate leaving little changed, announced, or insinuated leading to more questions than answers.

Focusing back on Spain, President Mariano Rajoy has found a reason to smile Monday, following the performance of his centre-right Partido Popular, which won the regional elections in Galicia over the weekend. This leaves behind an important hurdle in the country's path to request a financial bailout. Of course, the timing of this call for aid remains a mystery of the markets. For the time being, borrowing costs in the Spanish debt market are well below the 6.0% threshold, evidencing some kind of complacency by the markets within the peripheral country.

… EUR does not suffer from vertigo

Karen Jones, Head of FICC Technical Analysis at Commerzbank, comments:

The market is well placed to challenge the 1.3173/80 resistance… The risk has increased that we will see a break through this resistance as we have a confirmed buy signal on the daily technical indicators.

The expert also assesses that further impulse would clear the path to 1.3487/1.3531.
The same point of view is shared by the research team at Australian Westpac, which informs that

broad USD weakness should also help, leaving EUR/USD on track for 1.3170 initially, then 1.32-1.33 multi-day/week.

Bolstering the aforementioned prospect, Flemming Nielsen, Senior Analyst at Danske Bank, stressed that

"the number of short positions in EUR/USD was reduced from 72.6k to 53.5k, underlining that the FX markets have gained confidence in the euro", according to information out of the CFTC.

All in all, EUR/USD is poised to climb further in the very near-term. The complete absence of a docket in the euro bloc and in the U.S. favors today's intraday upside. The lack of dark clouds looming in Spanish blue skies on Monday would act as an extra support for the single currency.

… Looking ahead to Tuesday

The fallout of the U.S. Presidential debate looks to permeate the first hours of trading in Asia, preceding a measure of Business Climate in France. Once more, the 3m and 6m auctions of Spanish Letras would try to confirm the recent declining trend in yields, ahead of the preliminary figures of the Consumer Confidence in the eurozone as a whole.

Source: Euro Has 1.3170 In Sight