The euro saw a bullish trend against most of the major currencies during last week's trading session. The euro gained about 300 pips against the U.S. dollar, and the EUR/USD pair has crossed the 1.3700 bar. The 17-naiton currency also saw a 180 pips gain vs. the Japanese yen.
The euro strengthened last week following a U.S. stock market rally. The rally has boosted risk-appetite in the market, and as a result increased demand for higher-yielding assets, such as the euro and the British pound.
The euro was also affected by the bearish dollar. The dollar weakened last week after several economic reports have shown that the U.S. economy is recovering at a slower pace than estimated.
Last, the euro gained after a European Central Bank board member Lorenzo Smaghi hinted that an interest rates hike may take place soon in order to fight the rising inflation.
Looking ahead to this week, traders are advised to follow the leading economic releases from Germany, as any economic data from the euro zone's largest economy is likely to impact the euro. Traders are also advised to follow speculations regarding a possible interest rates hike, as these speculations have potential to further support the euro.