Rising off of 1.3265 support, the EURUSD has moved higher on the session and is set for another test of 1.3400 in the near term. Behind the move are three key themes that are bullish for the single currency and may make the difference on whether the pair successfully breaks through the formidable barrier.

Spanish Debt Auction

In the second high profile auction of the year, the Spanish Treasury once again held a successful short term bill auction that witnessed plenty of investor demand. Offering up 4.5 billion euros in 2-year and 3-year bonds, the Treasury was able to obtain more debt funding at a lower cost. Spain was able to sell 2.4 billion euros in the 3-year bonds at an average yield of 2.71%, down from 3.36% at a previous auction. All in all, the auction was able to fulfill approximately 9% of the country’s overall medium and long term funding needs – which is expected to hit 121 billion euros this year.

As always, lower yields continue to bolster confidence in the European Union as it solidifies the likelihood that Spanish PM Mariano Rajoy will not seek any EU led bailout. The notion helped to prop up the single currency and stabilize Spanish 10-year benchmark yields, which hover around 5% - down from the record 7.76% witnessed last year.

European Central Bank Reinforces Growth

In its latest monetary bulletin, ECB policymakers noted that although Europe’s economic outlooks remain well to the downside, the economy is expected to make positive ground later on in the year. Taking full credit for the potential advance, policymakers stated that “our accommodative monetary policy stance, together with significantly improved financial market confidence and reduced fragmentation, should work its way through the economy.” In addition, central bankers highlighted inflation that “should remain contained” as reforms make the “euro area a more flexible, dynamic and competitive economy.”

The latest round of comments reinforces the optimistic sentiment displayed last week following the central bank’s decision and lends additional support for Euro gains.

German Eco Minister Remains Bullish

Following the halving of German GDP estimates, German Economy Minister Philipp Rosler noted that the German economy has weathered the economic storm and remains resilient to the global recession. Additionally, the policymaker reiterated commitments by German politicians to a unified Euro economy, and stronger currency. This isn’t anything new as Mr. Roesler has remained bullish over the German economy since the beginning of the year. But, today’s comments are working in conjunction with the ECB bulleting to boost the single currency.