The euro jumped to a one-month high on 18 June amid optimism that the crucial Eurogroup meeting that has just begun will find a solution for the challenges of Greece and avoid its exit from the Eurozone.
By 8am GMT, EUR/USD traded as high as 1.4210, its highest since 18 May, before easing to 1.1385, from the previous close of 1.1339. Over the past two sessions, the single currency has rallied more than 1% against the dollar.
The euro's rally was also bolstered by the previous day's Fed statement that was more dovish than expected. The Fed Chairperson Janet Yellen did not sound like there will be a rate hike in the coming months, forcing markets to push ahead expectations to early next year.
Moreover, the targeted longer-term refinance operations (TLTRO) of the European Central Bank, the central bank's refinancing aid to the region banks, came in more than expected as per a release on Thursday, 18 June.
The TLTRO stood at €73.8bn, down from €97.8bn in the previous round, but beating the consensus of €60.0bn.
That Greece is facing severe challenges as any default on its dues to the IMF this month will likely lead to the collapse of its financial system itself has given way to expectations that something will work out at the policymakers' meeting on Thursday.
Separately, an ECB press release on Thursday noted that the ruling of the Court of Justice of the European Union (ECJ) confirming that the Outright Monetary Transactions (OMT) programme announced by the central bank in 2012 is compatible with EU law and within the ECB's competences.
The Federal Reserve on Wednesday, June 17, noted in its statement that global growth was tepid and that US growth in the first half of this year has missed the Fed's own estimates.
Technically, the EUR/USD pair is testing the resistance at 1.1468, beyond which it will be a more than five-month high for it. The levels to look for after that are 1.1535 and 1.1600.
On the downside, immediate support for the pair is 1.1280 and then 1.1200 ahead of 1.1080, a level endorsed by the 50-day simple moving average. The channel support at 1.1000 is the next level to watch which if it holds, the pair will keep its upside chances intact.