EUR/USD bulls looking for a close above 1.2350

• EUR/USD spikes despite hung parliament in Italy.
• EUR/USD headed test of closes above 1.2350?

EUR/USD has spike don the German coalition news following a better bid Friday closing session in European and US markets where the dollar was beaten up and with there being a more neutral outlook given that the focus has switched from rates to trade. 

SPD members approved a coalition with Merkel's CDU/CSU over the weekend with a vote of 66.02%, (78.3% of SPD members participated in the vote). Meanwhile, eyes will stay on the hung parliament in Italy and what course politics will take from here with a few options outlined here:

Political gridlock in Italy it is; election polls point to a hung parliament

The next domestic risks come in the form of  EZ Feb services PMIs and the ECB later in the week.

EUR/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the scale is bullish as the pair recovered well above its 20 SMA.

"Technical indicators maintain their bullish slopes within positive territory, while the pair ended the day near its daily high. The highs in the 1.2350 region come as the immediate resistance, with steady gains above it backing the case for an extension beyond the 1.2400 figure," Valeria added.