The euro gained against the US dollar on Thursday, as risk aversion caused by the nuclear crisis in Japan eased off, and investors wait for the debt auction by Spain.

The single currency reached a day high at 1.3995 during early European trade, before consolidating at 1.3992.

The pair EUR/USD is likely to find support at 1.3854, the low of March 15 and resistance at 1.4035, a 4-month high reached on March 7.

Spain will have its first bond auction on Thursday since European leaders last week agreed to increase the lending capacity of the European Financial Stability Facility to 440 billion euros ($613.8 billion). The country sells as much as 4.5 billion euros ($6.3 billion) of 30-year debt and 10-year securities.

Moody’s downgraded Spain’s debt by one notch to Aa2 last week, citing concerns over the cost of restructuring of the country’s banking sector and also the government’s ability to reach its borrowing reduction targets.

However, the euro traded lower against the Japanese yen, with the EUR/JPY pair dropping 0.08 percent to hit 110.53.

The volatility in Japanese currency is a direct result of the fast-emerging nuclear crisis. Earlier on Thursday, Japanese authorities said that they were intensifying efforts to cool reactors at Fukushima Daiichi nuclear plant. Sea water was poured on the plant by army helicopters in an attempt to keep the fuel rods from over-heating and stop further radiation leaks.