EUR/USD hit 1.2433 during U.S. trade, the session high; the pair subsequently consolidated at 1.2424, gaining 0.18%.
The pair was likely to find support at 1.2241, Monday’s low and near-term resistance at 1.2242, Monday’s high and a one-month high.
Expectations that the ECB will soon take steps to help lower Spanish and Italian borrowing costs have been building since central bank head Mario Draghi indicated last week that the bank may restart its bond buying program.
The euro’s gain were capped by concerns over how effective the ECB’s new bond buying program would be, in the light of differences from the bank’s existing scheme.
Draghi also said that any steps by the bank were conditional on euro zone governments experiencing difficulty on bond markets activating the bloc’s bailout funds to purchase government bonds and accepting strict conditions and supervision.
Earlier Tuesday, a raft of weak economic data out of the euro zone underlined concerns over the impact of the long running debt crisis on the outlook for growth in the region.
German factory orders tumbled 1.7% in June, almost twice as much as expectations for a 1.0% decline.
A separate report showed that Italian gross domestic product contracted by 0.7% in the second quarter, slightly worse than expectations for a 0.6% contraction.
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