LONDON, Oct 2 Treasury prices edged lower in European trading on Tuesday, tracking a fall in low-risk euro zone bonds as Spain's apparent willingness to seek a bailout saw investors prefer riskier assets. * With little in the way of economic data to digest and the focus on Friday's U.S. non-farm payrolls report, the euro zone's battle against its debt crisis dominated trading with Spain signalling it may be ready to ask for a bailout. * That lifted appetite for higher-yielding bonds, such as those issued by Spain, at the expense of safe-haven investments such as U.S. Treasuries, where futures prices slipped 5/64 to 133-32/64 - albeit with only low volumes to back the move. * "We're hostage to what people think about what's going on in the euro zone. The Spanish appear to be edging towards a bailout but Germany are saying 'hold on'... the result is Bunds are off a bit and Treasuries are down a bit in sympathy," said Marc Ostwald, strategist at Monument Securities in London. * Traders said prices were likely to remain within a fairly tight band until Friday's closely watched payrolls report, forecast to show 113,000 jobs were added in September. * Technical charts showed the recent rally in Treasury futures, which rose two full points in the last two weeks of September, may be running out of steam and vulnerable to further falls. * "We are asking that 133-01/32 is taken out to add weight to the idea that we've topped out once more," said Clive Lambert, technical analyst at Futurestechs, referring to the support offered by the 38 percent retracement of the September rally.