FOREX-Euro relief proves fleeting; yen hits 6-mth low vs dollar

* Euro backs off previous day's high

* Markets take profits on recent gains following Greek bailout deal

* Dollar/yen stays firm, touches fresh 6-month high (Updates prices, adds comments)

SINGAPORE, Feb 22 (Reuters) - The euro struggled to make headway on Wednesday, having retreated from near two-week highs as optimism over the long-awaited Greek bailout deal quickly gave way to concerns about economic growth and implementation risks.

The yen dipped against the dollar and touched a fresh six-month low, staying on the defensive after the Bank of Japan (EUREX: FMJP.EX - news) 's surprise monetary easing last week.

The euro held steady from late U.S. trade on Tuesday at $1.3232, down from Tuesday's high of $1.3293, which was the euro's highest level since Feb. 9. It faces resistance at $1.3308, the 100-day moving average.

"The euro had priced in a lot of the good news, in the sense that it had priced in already some form of agreement," said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole (Milan: ACA.MI - news) in Hong Kong.

"It's not surprising to see it struggling to break higher," Kotecha added.

While Greece's aid package helped ease fears of an immediate default, the country's economic outlook remained anything but rosy, a problem that could yet derail its efforts to meet tough cost-cutting measures.

Parliaments in three countries that have been most critical of bailouts - Germany, the Netherlands and Finland - must now approve the package. German Finance Minister Wolfgang Schaeuble, who caused an outcry by suggesting that Greece was a "bottomless pit", said he was confident it would be passed.

The dollar index edged up 0.1 percent to 79.136 as the euro floundered.

Against the yen, the dollar rose 0.3 percent to 79.961 yen at one point, its highest level since early August 2011.

The dollar has rallied roughly 5 percent from lows around 76.00 yen hit in early February, spurred in part by yen-weakness after the Bank of Japan's surprise easing last week.

"The pace of the yen's move in recent days looks unsustainable. But the yen has the ability to weaken further, although it's not going to do so in a straight line," analysts at Societe Generale (Paris: FR0000130809 - news) wrote in a note.

A trader for a Japanese bank in Tokyo said dollar offers were lined up at levels above 80 yen, while dollar buyers such as Japanese importers were placing bids at levels around 79 yen.

The dollar is now testing strong technical resistance from a cloud on the weekly Ichimoku chart.

The dollar has not managed to stay above the weekly cloud for any sustained period since mid-2007, and a breach of that resistance could give the dollar additional momentum against the yen.

The dollar has clawed above the bottom of the cloud at 79.73 yen, and faces more resistance at the cloud top, which comes in at 80.94 this week.

The Australian dollar held steady at $1.0658, more than a full cent lower from this week's high of $1.0817.

The Aussie dollar showed limited reaction to data showing that China's manufacturing sector contracted in February for the fourth straight month as new export orders dropped sharply in the face of the euro area debt crisis.

The HSBC flash purchasing managers index, the earliest indicator of China's industrial activity, rose to a four-month-high at 49.7 in February. The PMI has been below 50, which demarcates expansion from contraction, for most of the last eight months.

China's economic outlook is a focal point for market players, who fret that risk sentiment could take a hit if the country's economic growth were to slow down too sharply. (Additional reporting by Ian Chua in Sydney and Hideyuki Sano in Tokyo; Editing by Ramya Venugopal)

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FOREX-Euro up as Greek deal provides relief but caution persists

(Updates prices, adds quotes)

* Euro gains despite doubts about Greek bailout implementation

* Resistance just above $1.33 seen capping euro gains

* Euro zone consumer confidence rises in February

* Dollar/yen hovering near 6-1/2-month high

NEW YORK (Frankfurt: A0DKRK - news) , Feb 21 (Reuters) - The euro rose against the dollar on Tuesday as an overnight bailout deal for Greece prompted investors to pare positions against the currency despite doubts about the deal's implementation.

Euro zone finance ministers sealed a 130-billion-euro ($172 billion) bailout for Greece on Tuesday to avert a chaotic default next month after forcing Athens to commit to unpopular cuts and private bondholders to take bigger losses.

The euro hit a session high of $1.3292 after the successful talks overnight. In midday trade, the euro was 0.1 percent higher at $1.3254, with near-term support at the day's low of $1.3184.

"Being short the euro is a stale position right now," said Douglas Borthwick, managing director, head of trading, at Faros Trading in Stamford, Connecticut. "Many had questioned whether or not Greece would stay in the EUR, but last night's decisions were a resounding vote of yes."

Currency speculators' bets in favor of the U.S. dollar soared in the latest week, according to data from the Commodity (Euronext: COMIN.NX - news) Futures Trading Commission released on Friday. Euro shorts rose as negotiations about Greece's second rescue package dragged on.

To be short a currency is to bet it will decline in value, while being long is a view its value will rise.

Borthwick said there is market talk that finance ministers are discussing an International Monetary Fund firewall and while nothing has been announced, he believes there is one coming, with expected donors including Japan (EUREX: FMJP.EX - news) , China and Mexico to name a few.

"An announcement of some sort will likely come out of the upcoming G20 meeting and that could move the euro sharply higher," he said. "The euro has also yet to catch up with Italian and Spanish bond yields, which have dropped to levels last seen at the start of September of last year."

A break of $1.3320 is seen likely and after that, he said momentum should take over, with the euro possibly reaching $1.40.

"A lot of uncertainty has been removed, with regards to Greece as well as the euro zone's economy," Borthwick added.

Euro zone consumer confidence rose for the second consecutive month in February as Europeans showed timid signs of increased spending after last year's collapse in morale.

The International Monetary Fund forecasts a 0.5 percent contraction in the euro zone economy in 2012.

Investors remain concerned about how Greece would implement the harsh austerity measures demanded of it, while some also saw longer-term risks to the euro following an expected second injection of cheap funds by the European Central Bank next week.

"While the Greece deal removed a temporary risk, the good news was largely priced in ahead of the weekend, " said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.

"The deal was pretty much expected and the real surprise would have been if no deal was reached," she said. "There are still many hurdles to jump before Greece becomes a non-issue for markets and broader European problems should keep the euro weighed to the downside over the near term."

Sutton said her first-quarter forecast for the euro is $1.29 with a year-end target of $1.25.

The euro may get a lift if euro zone provisional purchasing managers' surveys on manufacturing and services activity on Wednesday and Thursday's German Ifo sentiment survey show some improvement.

YEN AT MULTIMONTH LOWS

Approval of the Greek deal saw the euro hit a fresh three-month high against the yen. It pulled back from that high of 106.00 yen and in New York trade, was last up 0.1 percent at 105.58 yen.

The yen hovered near multimonth lows against most other major currencies as last week's surprise easing by the Bank of Japan prompted speculators to step up selling of the yen.

"Our end-year forecast of 80 yen has almost been hit already," said Mansoor Mohi-uddin, strategist at UBS (NYSEArca: DJCI - news) . "The risks are now to the upside to this forecast with dollar/yen likely to trade in a 75-85 range in future compared to 75-80 previously."

The dollar was last up 0.1 percent at 79.72 yen, not far from 79.89 yen hit on Monday, a 6-1/2-month high. (Additional reporting by Jessica Mortimer, Editing by Gary Crosse)

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