The euro retreated from a 4-1/2-month high against the dollar on Tuesday after failing to push through options-related barriers around $1.4250, though traders say the currency may soon retest that level. The euro hit a 4-1/2-month high of $1.4249, according to Reuters data, but gave up its gains after running into what traders said were options-related barriers around $1.4250. It last traded at about $1.4184 [EUR=X 1.4184 -0.0035 (-0.25%) ]. But with the European Central Bank widely expected to raise interest rates next month, traders say the euro may make another run at those levels. Further resistance was seen in the $1.4275 and $1.43 areas, while technical analysts at Citigroup said they expect an eventual test of the $1.48-$1.51 area in the near term. The euro hit $1.5144 back in November 2009. Japan again warned that it would act to keep the yen in check, but traders saw no action in the FX market on Tuesday from Japanese or other G7 authorities following last Friday's joint intervention. That resolve could be tested if dollar/yen looks like breaking back below 80 yen. The dollar [JPY=X 81.03 -0.09 (-0.11%) ] was last trading down marginally on the day versus the yen but in the middle of the day's narrow range of 80.80-81.30 yen. Yen volatility has eased significantly since late last week, and some analysts said calmer markets in the coming weeks would decrease the need for Tokyo to smooth any appreciation in the Japanese currency, even if the dollar creeps below 80 yen.

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