Forex Pros – The euro trimmed gains against the U.S. dollar on Monday, as reports of an explosion at a Japanese nuclear reactor dampened risk appetite, following Friday’s devastating earthquake and tsunami in the northeast of the country.
EUR/USD hit 1.3979 during early European trade, the pair’s highest since March 8; the pair subsequently consolidated at 1.3929, rising 0.19%.
The pair was likely to find support at 1.3751, Friday’s low and resistance at 1.4035, the high of March 7 and a four-month high.
Earlier in the day, Japan’s Ministry of Economy, Trade & Industry said a hydrogen explosion had occurred at reactor three in the nuclear power plant in Fukushima, north of Tokyo, two days after an explosion hit reactor one.
Officials said the reactor core was still intact and that radiation levels were below legal limits.
Japan’s Prime Minister Naoto Kan said the situation at the nuclear plant was alarming, and the earthquake had thrown Japan into “the most severe crisis since World War II”.
The Bank of Japan announced earlier that it was pumping a record JPY15 trillion into the financial system and doubling the size of its asset-purchase program to JPY10 trillion.
The euro was also higher against the yen, with EUR/JPY climbing 0.36% to hit 114.21.
The single currency remained supported after European Union leaders reached an agreement on a German-inspired competitiveness pact on Friday. The agreement was considered a necessary precursor for EU leaders to reach an agreement to overhaul the 17-nation bloc’s bailout fund, the European Financial Stability Facility.
ForexPros.com
