The EUR rallied against the dollar on Monday, hitting a two-month high near $1.37 as expectations of higher euro zone interest rates sparked traders to push the currency above important technical levels. The EUR was up around 0.3% at 1.3650 after climbing as high as 1.3685, its highest since November.
Political turmoil in Ireland again highlighted problems in indebted euro zone countries and a suicide bombing at Russia's biggest airport capped the European currency's rise. But the euro gained momentum in the New York session, and traders said tough talk on inflation from European Central Bank President Jean-Claude Trichet on Sunday was a catalyst driving it to its highest level since November.
In addition, solid data on euro zone industrial orders and a robust euro zone flash estimate of services purchasing managers activity also bolstered the currency.
Investors may look for the unusual price volatility to continue in the EUR/USD as the pair attempts to stabilize and find new support and resistance lines. Large price jumps such as these are not common place and present terrific opportunities to take advantage of the price swings for large profitable gains.