The euro bounced back on Monday as some sovereign investors viewed its selloff late last week on concerns about Greek debt as overdone given still favourable interest rate differentials.
Technical indicators however suggest gains could be temporary.
A rebound in some commodity prices after their rout last week also helped to pull the euro up from a three-week low hit last week as it boosted risk appetite. It also lifted growth-linked currencies like the Australian dollar.
The euro continues to be supported by favourable rate differentials with the European Central Bank expected to raise interest rates further this year. However, with bullish bets on the euro at their highest since July 2007, the single currency could see a move lower, before heading back towards the $1.50 level.
"The bounce has seen the euro rise past $1.44, but the market is a bit cautious given the overextended position in currencies," said Paul Mackel, director of currency strategy at HSBC.