* Euro up 0.1 pct at $1.2386 <EUR=>
* Euro supported by month-end fixing demand, long weekend
* Upside limited by option expiries at $1.2400
* Euro on track for biggest monthly fall since Jan 2009
(Recasts, adds quote, updates prices)
By Tamawa Desai
LONDON, May 28 (Reuters) - The euro rose on Friday, nearing
an end to a month to forget for the single currency as euro zone
sovereign risk concerns sparked its worst crisis since its
inception 11 years ago.
The euro has fallen some 12 cents against the dollar in the
month to hit a 4-year low of $1.2143. It is on track for a hefty
6.7 percent monthly decline, which would be the biggest drop
since January 2009 as well as the sixth straight monthly fall.
That was in spite of a $1 trillion safety net set up by
European officials to ward off adverse effects from Greece's
debt woes that threatened to spill over into other euro zone
countries, and new austerity measures from Spain, Portugal and
Italy.
While market turmoil has calmed, concerns about the euro
zone remain entrenched.
"The financial package was a big step but it has its flaws.
The biggest issue is the turnaround by the European Central Bank
in buying government bonds," said Derek Halpenny, European head
of global currency research at Bank of Tokyo-Mitsubishi UFJ.
His firm forecasts the euro to rebound to $1.26 in the next
month, but to fall to $1.10 in 12-months time.
MONTH-END FIXING
On the day, the euro gained on month-end fixing demand for
euros, as well as position-squaring before a long weekend in
both the U.S. and UK markets.
But the euro's upside was limited as options with a strike
price of $1.2400 were set to expire later in the day.
By 1115 GMT, the euro rose 0.1 percent at $1.2386 <EUR=>,
after rising to $1.2452.
"There seem to be a lot of month-end fixings and the euro is
gaining from these. No matter how bad things are, if the
market's positioning is all one way then there's a bit of a need
for a breather," one London-based trader said.
The euro gained more than 1.5 percent on Thursday after
China reaffirmed its commitment to diversify currency holdings
away from the dollar, easing concerns that the euro may be
quickly losing favour as a reserve currency.
Analysts said a key support level was $1.2135, the 50
percent Fibonacci retracement of the 2000-08 advance, just above
the recent four-year low of $1.2143.
Charts show a monthly close below $1.2135 would favour more
weakness, with analysts seeing the next downside support at
$1.1640, a trough hit in November 2005.
Against the yen, the euro <EURJPY=R> was up 0.2 percent at
112.92 yen, while it rose 0.3 percent against sterling
<EURJPY=R> to 85.06 pence.
The dollar <JPY=> was little changed at 91.15 yen, while the
dollar index <.DXY>, which measures the greenback's performance
against a basket of currencies, fell 0.15 percent to 86.048.
(Additional reporting by Jessica Mortimer)
