EUR/USD hit a session high of 1.3009 on Friday before settling at 1.2991, up 0.71% for the day and 0.36% higher for the week.
The pair is likely to find support at 1.2878, Thursday’s low and resistance at 1.3076, the high of March 12.
The euro found support after Greece’s third largest lender Piraeus Bank agreed to acquire the Greek branches of Cyprus's banks to protect them from the crisis in Cyprus.
Meanwhile, political leaders in Cyprus prepared to pass legislation to needed to secure a EUR10 billion euro bailout from the European Union and the International Monetary Fund ahead of a Monday deadline.
A previous agreement that included a levy on deposits in Cypriot banks was rejected by the country's parliament on Tuesday.
Meanwhile, concerns over the deteriorating economic outlook for the euro zone weighed after the Ifo Institute said Friday that its German business climate index slipped to 106.7 in March from 107.4 a month earlier.
The data came one day after a report showed an unexpected contraction in the German manufacturing sector in March.
The Federal Reserve announced Wednesday that it will leave monetary policy unchanged in spite of recent signs that the U.S. recovery is gaining traction, citing concerns over high unemployment levels and risks from tax increases and federal government spending cuts.
Speaking at the end of the bank’s two-day policy meeting, Fed Chairman Ben Bernanke said the central bank may gradually wind down the pace of its bond buying, but only after the labor market shows signs of being on a more stable footing.
The euro was higher against the pound on Friday, with EUR/GBP rising to session highs of 0.8546 before settling at 0.8530, up 0.33% for the day, trimming the week’s losses to 0.53%.
Elsewhere, EUR/JPY rose to session highs of 123.46, before settling at 122.75, up 0.27% for the day and 0.55% lower for the week.
In the week ahead investors will be closely monitoring developments in Cyprus as a failure to reach a deal could see the country exit the euro zone.
Market participants will also be watching German data on retail sales on Tuesday amid concerns over the economic outlook for the euro zone and an Italian government debt auction on Thursday.
The U.S. is to release a flurry of data including reports on durable goods orders, home sales and consumer confidence.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 25
Federal Reserve Chairman Ben Bernanke is to speak at an event in London; his comments will be closely watched for any indication of the possible future direction of monetary policy.
Tuesday, March 26
In the euro zone, Germany is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
Later Tuesday, the U.S. is to release a flurry of economic data with government reports on durable goods orders and new home sales as well as a report on consumer confidence.
Wednesday, March 27
The euro zone is to release preliminary data on consumer inflation, which accounts for a majority of overall inflation. In addition, Italy is to hold an auction of 10-year government bonds.
The U.S. is to produce industry data in pending home sales and a government report on crude oil stockpiles.
Thursday, March 28
In the euro zone, Germany is to publish official data on the change in the number of people employed.
The U.S. is to release the weekly government report on initial jobless claims and revised data on fourth quarter economic growth.
Friday, March 29
Markets in Germany are to remain closed in observance of Good Friday.
The U.S. is to round up the week with official data on personal spending and expenditure and revised data form the University of Michigan on consumer sentiment and inflation expectations.
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