Forexpros – The euro was up against the yen on Wednesday, rising to a two-day high boosted by hopes that European leaders will make a breakthrough on tackling the euro zone’s debt crisis at this weekend’s European Union summit.
EUR/JPY hit 106.44 during European morning trade, the pair’s highest since Monday; the pair subsequently consolidated at 106.36, gaining 0.67%.
The pair was likely to find support at 104.77, Tuesday’s low and a four-day low and resistance at 107.44, last Friday’s high and a five-week high.
The euro found support amid fresh hopes that Sunday’s EU summit could result in a breakthrough in dealing with the debt crisis in the region after German Chancellor Angela Merkel said the summit will mark an important step in resolving the euro zone’s debt woes.
But investors remained cautious after ratings agency Moody’s downgraded Spain’s sovereign debt rating by two notches late Tuesday and said it was maintaining a negative outlook on Spain’s rating to reflect the “downside risks from a potential further escalation of the euro area crisis.”
The announcement came one day after Moody’s placed France’s triple-A credit rating on review.
The euro was also higher against the U.S. dollar, with EUR/USD climbing 0.64% to hit 1.3841.
Later Wednesday, the U.S. was to publish government data on building permits, housing starts and consumer price inflation.
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