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Forex - EUR/USD extends losses amid risk aversion on Japan fears

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Forex Pros - The euro extended losses against the U.S. dollar on Tuesday, falling to a fresh two-day low, as investors sought refuge in traditional safe haven currencies amid growing fears over Japan's escalating nuclear crisis.

EUR/USD hit 1.3856 during European early afternoon trade, the pair's lowest since Friday; the pair subsequently consolidated at 1.3906, shedding 0.60%.

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, an explosion at the No. 2 reactor at the Fukushima Daiichi nuclear power plant, located 155 miles northeast of Tokyo, sent low levels of radiation floating towards the city, prompting some people to flee the capital and others to stock up on essential supplies.

Elsewhere, a worse-than-expected reading for German economic sentiment in March weighed on the single currency.

The ZEW Centre for Economic Research reported that its index of German economic expectations fell to 14.1 points in March from 15.7 points in February and said the Japanese earthquake "could slow down the dynamics of German economic growth at least in the short run."

The euro was also lower against the yen, with EUR/JPY tumbling 1.16% to hit 112.85.

Later in the day, the U.S. Federal Reserve was to announce its federal funds rate. The U.S. was also to publish official data on manufacturing activity in the New York region.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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