Market Insider

This is the currency battleground you'll want to watch

Traders watch the dollar

Dollar bulls are not ready to throw in the towel and are still betting diverging central bank policy sends the euro to parity with the U.S. currency later this year.

Weak technicals for the greenback are making some investors squirm, as the euro charges ahead and looks set to score more gains. That is the battleground for the dollar, which was higher against the pound, the yen and emerging market currencies Thursday.

"We still have our forecast in euro/dollar ending the year at parity, and we remain comfortable with that, mainly because we see the slowdown we had in the last couple of months as transitory," said Ian Gordon, senior foreign exchange strategist at Bank of America Merrill Lynch.