(Corrects four-year low in paragraph 5 to...$1.1876, not...
$1.2176)
* Euro backs down at $1.21 as profits taken on run-up
* Euro faces waves of resistance in $1.2135-75 band
* Aussie slips a China data as expected, profits booked
By Charlotte Cooper
TOKYO, June 11 (Reuters) - The euro ran into headwinds above
$1.21 on Friday, as profit-booking set in when it failed to push
through hefty resistance, and investors took a lack of surprises
in Chinese data to book gains in the Aussie dollar.
The euro, which rose on Thursday for a third straight day,
stalled at important resistance in the $1.2135-55 area, with a
mixture of sellers and stop-loss buy orders expected above there.
Traders said profit-taking emerged after the euro rallied 1.3
percent on Thursday when higher-yielding currencies such as the
Aussie also climbed and share markets rose, adding that the
market was cautious the short-covering rally may not last long
before the single currency resumed its downward trend.
"The run is a little bit exhausted. On the upside the real
cap on this is $1.2217 but it's struggling around the $1.2150
level," said Mitul Kotecha, global head of FX strategy at Credit
Agricole CIB in Hong Kong.
The euro climbed as far as $1.2149 before slipping back to
just above $1.2100 <EUR=>. It was last above $1.22 on June 4,
before tumbling to a four-year low at $1.1876.
It has a host of chart points in this area, including
$1.2135, which is roughly a 50 percent retracement of its
2000-2008 rally. Resistance from former support in May sits at
$1.2150-55.
It has shed 1.5 percent this month and nearly 16 percent this
year, driven ever lower by fiscal concerns in the euro zone, but
it got a lift on Thursday when strong demand for Spanish bonds
eased concern about the country's ability to finance its debt.
"I expect the euro to fall in the medium-term. But as sellers
can be squeezed after its rebound this week, I wouldn't be
surprised if it rises above $1.22," said a trader at a Japanese
bank.
A spike in Chinese exports also boosted confidence on global
growth and investors breathed a sigh of relief after European
Central Bank President Jean-Claude Trichet said three-month
emergency loans to banks would continue until September.
A trader said the ECB's move had encouraged some in the
market to be build positions for the next quarter by buying
higher yielding currencies such as the Australian dollar.
But after another round of Chinese data on Friday was in line
with leaks and forecasts, Nobuhiko Akai, senior manager of the
forex trading group at Bank of Tokyo-Mitsubishi UFJ, said those
who bought the Aussie quickly took profits.
"The latest rebound buying in the euro is still driven by
short-covering. Unless it goes back to around $1.25, market
sentiment will not change drastically," Akai said.
The euro retreated below 111.00 yen <EURJPY=R> after pushing
back above that level for the first time in a week, while the
dollar rose 0.25 percent to 91.55 yen <JPY=>.
Higher yielding and commodity-linked currencies forged big
gains against the dollar and the yen on Thursday, helped by
Chinese trade numbers.
The dollar index, which hit at 15-month high 88.708 on
Monday, has since retreated below 88.0 and was little changed at
87.165 <.DXY>.
But the Aussie, which jumped 2.7 percent in the previous
session, failed to maintain a move above $0.8500 <AUD=D4>,
faltering at resistance at $0.8510 and retreated to $0.8438.
If it can move higher, it faces more resistance at $0.8550
and then about $0.8570, which is a 38.2 percent retracement of
its drop from an April high near $0.94 and a May low at $0.8066.
"We are seeing a bit of a cautious move, a gradual step back
in but we're a long way from a big rush back in," Kotecha said.
(Additional reporting by Satomi Noguchi and Hideyuki Sano in
Tokyo, and Reuters FX analysts Rick Lloyd in Singapore and
Krishna Kumar in Sydney; Editing by Edwina Gibbs)
