FOREX NEWS - Euro at 2-mth high as Greek hopes spur short covering

* Euro supported by Greek deal hopes, short-covering * Resistance seen near 100-day moving average around $1.3333 * Dollar-index at 2-mth low; Aussie hits 6-mth high By Nia Williams LONDON, Feb 8 (Reuters) - The euro rose to a two-monthhigh versus the dollar on Wednesday, as short positions weretrimmed on optimism Greek leaders are nearing a deal on measuresto secure second bailout and avoid a messy default, despite slowprogress in talks. Following a string of delays in negotiations, Greek leaderswill meet again on Wednesday in a bid to strike a deal onpainful austerity steps in return for another internationalrescue package, Analysts said the euro could test $1.33 and push as high as$1.35 if a deal is finalised. A sharp selloff in the singlecurrency was seen as unlikely even if talks drag on for anotherday, given sizeable euro short positions that investors arereluctant to add to before knowing the outcome of thenegotiations. The euro rose to $1.3289, its highest level sinceDec. 12. Topside resistance came in at the 100-day movingaverage around $1.3333, while option-related offers werereported ahead of $1.3300. "There has been a propensity by the market in general tolook at the Greek scenario with a glass-half-full approach,irrespective of the deadlines Greece has missed," said JaneFoley, senior currency analyst at Rabobank. "I think positioning has a significant part to play.Although shorts are off their record levels, they are stillreally extreme and people do not want to get caught in a rally." The latest positioning data showed currency speculatorstrimmed euro short positions to 157,546 contracts, down from arecord 171,347 contracts the previous week. Euro resilience was also down to the European Central Bank'sprovision of low-rate long-term funds to banks that ensuredample liquidity in the banking system and was helping to prop uprisk appetite, Foley said. The bank holds another three-year tender at the end ofFebruary. Some strategists said euro upside was limited as many shortpositions had already been covered on Tuesday when the europosted its strongest daily gain since November. It climbed frombelow $1.30 to $1.3270 on talk a Greek deal was imminent. Morgan Stanley strategists said they established a shorteuro position at $1.3250 and are targeting $1.2390 with a stopat $1.3350, given the structural problems still facing the eurozone even if Greece gets a second bailout. "If we see a deal being signed it's going to be europositive, but that's already priced in. It's going to be trickytrying to pick the top but a rebound is going to fairly limitedand short-lived," said Morgan Stanley strategist Ian Stannard. "The broader problems within the euro zone are going to beeven harder to tackle." YEN RETREATS The euro also hit a seven-week peak of 102.449against the yen, gaining strength on reported stop-loss buying.The yen retreated broadly on the crosses, with traders sayingthe technical outlook for cross/yen pairs had improved aftertheir recent breach of some technical resistance levels. Stop-loss dollar buying, coupled with dollar buying by Japanese importers and offshore players, also helped to lift thegreenback against the yen, traders said. It rose 0.3 percent to77.06 yen, pulling away from a three-month low of 76.027yen hit last week. Earlier on Wednesday, the yen showed little reaction to datashowing that Japan's current account surplus shrank sharply to a15-year low in 2011. Better risk appetite and hopes Greece is close to agreeingausterity measures helped to boost commodity currencies. TheAustralian dollar rose to a six-month high of $1.0845. Broad dollar weakness pushed the greenback to 78.443 againsta basket of currencies, its lowest level in around twomonths.