The euro was headed for its best week in a month on Friday and has blown past major resistance levels as investors piled into bets the U.S. dollar has further to fall as the world begins to emerge from the Covid-19 pandemic.
The common currency is up 1.5% for the week so far and last sat comfortably at $1.2140. Having finally breached $1.2000 after multiple attempts, momentum funds have surged in to long positions. The next serious chart resistance level is not until $1.2555.
The euro is also set for its best week against the Japanese yen in six months, even though the yen rose a little against a broadly weaker dollar overnight. Sterling touched a one-year high and the yen hit a two-week top.
“The euro is holding above the $1.21 level for the first time since spring 2018, despite the fact that there is only a week to go before the European Central Bank is expected to add more policy stimulus,” said Rabobank strategist Jane Foley.