November 15, 2011 / 12:56 AM / 8 years ago

FOREX-Euro steady, stuck near bottom of recent range

* Italian debt yields resume rise after auction

* Euro support near $1.3569, Ichimoku cloud bottom

By Masayuki Kitano

SINGAPORE, Nov 15 (Reuters) - The euro held steady against the dollar on Tuesday, but was stuck near the bottom of its range so far this month as new governments in Italy and Greece failed to ease fears about the euro-zone sovereign debt crisis.

The euro had gained some reprieve in recent sessions as a change in leadership in Italy and Greece eased worries of political uncertainty and stirred hopes for progress in tackling Europe’s debt problems.

But such optimism was tempered when Italian and Spanish government bonds came under renewed selling pressure on Monday. A drop in European equities, including banking shares, also did the euro no favours.

While day-to-day fluctuations in the euro and investor risk appetite are hard to predict, the single currency is likely to remain under pressure versus the dollar and the yen in coming weeks, said Junya Tanase, chief FX strategist for J.P.Morgan in Tokyo.

“There is no doubt that Europe is nowhere near a situation that can be viewed with optimism,” Tanase said.

“The bias is toward risk-off with both the dollar and the yen rising, while cross/yen pairs including euro/yen are likely to come under downward pressure,” he added.

The euro held steady at $1.3628, struggling to regain ground after dipping 0.8 percent the previous day. The euro is now at the lower end of its trading band since late October of $1.3484 to $1.4248.

Possible support for the euro lies near $1.3569, the bottom of the cloud on the daily Ichimoku chart, a popular form of technical analysis.

The single currency held steady versus the yen at 105.07 yen , stuck near a one-month low around 104.74 yen hit last week.

Italy paid a euro-era high price to sell five-year bonds on Monday, just a day after former European Commissioner Mario Monti was named to lead the country — a move that had been hoped would help restore investor confidence.

The dollar held steady against the yen at 77.11 yen, hovering near Monday’s two-week low around 76.81 yen, which was the lowest since Japan’s massive yen-selling intervention on Oct. 31.

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