FOREX-Euro turns lower on German finance minister comments

* German FinMin sees no definitive solution at Oct. 23 EU summit

* Comments dent optimism, push euro off one-month high vs dollar

* Further gains could see euro test $1.40

By Jessica Mortimer

LONDON, Oct 17 (Reuters) - The euro came off highs on Monday after German Finance Minister Wolfgang Schaeuble said a forthcoming European Union summit would not yield a definitive solution to the region's debt crisis.

The euro was last down 0.3 percent against the dollar at $1.3836 after Schaeuble's comments, which dented optimism after the weekend's G20 summit that EU leaders would decisively address the region's problems On Oct. 23.

The single currency earlier hit a one-month high of $1.39148 on EBS trading platform but faced resistance ahead of $1.40. Analysts said a break above there was possible, with some investors wary of selling the currency in case of a positive outcome at the summit.

"The euro will probably go above $1.40 as we go through this week, but we could see a 'buy the rumour, sell the fact' response next week," said Steve Barrow, head of G10 currency research at Standard Bank.

"My bias would be to sell into any strength, but not aggressively".

Traders cited offers ahead of $1.3930 which could halt the euro's advance towards $1.40 near-term, followed by technical resistance at $1.3937 -- marked by a couple of daily highs hit in September -- then at its 55-day moving average near $1.3952.

The euro has recovered strongly since hitting a nine-month low around $1.3145 on Oct. 4, but its recent gains have left it vulnerable to a pullback if investors become worried EU leaders may not be able to contain the debt crisis.

"Generally investors would rather be long dollar and short euro and would be quick to reset those positions," said Niels Christensen, currency strategist at Nordea in Copenhagen.

The euro rallied 3.5 percent against the dollar last week after the leaders of Germany and France pledged to unveil a new package for solving the two-year crisis at the EU summit, including an agreement on how to recapitalise banks.

Data showed speculators pared short euro positions in the week to Oct. 11, though traders and analysts said it was likely that not all short positions had been cleared, leaving scope for further short-covering to help the euro.

The dollar index fell to a one-month low of 76.441 before recovering to 76.746, up 0.15 percent on the day.

UNCERTAINTIES REMAIN

Above $1.40, the euro faces resistance around $1.4076, its 200-day moving average. It has traded below this technical indicator since early September.

While attendees at the G20 summit said the pace of discussions was encouraging, policymakers face resistance from banks over moves to increase private sector participation in Greek debt restructuring and to force banks to raise capital.

Underscoring the difficult issues to be addressed, Germany's Schaeuble said on Sunday that Greece's debt crisis could not be solved without larger write-downs on Greek debt.

Schaeuble speaks again in London later on Monday.

In July, private creditors agreed to a voluntary write-down of 21 percent on their Greek debt, a figure which now looks insufficient. Euro zone officials said last week that losses were likely to be between 30 and 50 percent.

"If recent media reports are confirmed and the amount of haircuts does not exceed 50 percent, in our view this may fail to appease concerns about the sustainability of the Greek debt and thus provide no lasting support for the euro," Citi strategist Valentin Marinov said in a note.

The euro hit a five-week high of 107.67 yen, according to EBS data, but was last down 0.2 percent at 106.97 yen.

Earnings from U.S. companies including Citigroup , Goldman Sachs and Apple could also affect the euro's performance, which has closely tracked investors' appetite for stocks and other risky assets.