Forex - EUR/USD hits session highs, still vulnerable

The euro rose to session highs against the dollar on Thursday after steep falls in the previous session prompted bargain buying, but sentiment on the single currency remained fragile.

EUR/USD hit 1.3074 during European morning trade, the session high; the pair subsequently consolidated at 1.3063, gaining 0.22%.

The pair was likely to find support at 1.2967, the low of April 8 and resistance at 1.3113, the high of April 15.

Demand for the euro continued to be supported after the Bank of Japan’s aggressive easing program caused the yen to weaken broadly.

Spain saw borrowing costs fall to the lowest level since September 2010 at an auction of five-and ten-year government bonds on Thursday. 
Meanwhile, France auctioned five-year bonds at record low yields as sentiment on euro zone bonds remained supported by BoJ easing.

But the single currency remained under pressure amid concerns over the outlook for economic growth in the euro zone and the risk of a fresh flare up of the region’s debt crisis.

The euro fell sharply against the dollar on Wednesday after European Central Bank Governing Council member Jens Weidmann said the bank could cut interest rates if economic data indicated that it was warranted.

The euro pushed higher against the pound and the yen, with EUR/GBPrising 0.20% to 0.8565 and EUR/JPY climbing 0.45% to128.42.

The U.S. was to release official data on initial jobless claims and the Philly Fed manufacturing index later in the trading day.

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