FOREX-Euro rises on strong demand for Greek bond

* Euro supported on strong demand for Greek bond issue

* Euro up 0.2 pct at $1.4175

* Dollar slips, traders take profits on last week's gains

(Adds comment, updates prices)

By Neal Armstrong

LONDON, Jan 25 (Reuters) - The euro rose against the dollar and the yen on Monday as an offer of five-year Greek sovereign bonds met strong demand.

Technical support also boosted the single currency against the dollar, analysts said, while traders booked profits on the U.S. currency's gains last week.

"IMM data has shown people have built up short positions in the euro and the fact that the Greek bond issue Monday is going with such ease has made some wary of maintaining those positions," said Mark Oswald, FX and rates strategist at Monument Securities.

By 1240 GMT, the euro was up 0.1 percent on the day at $1.4163 after touching a high versus the dollar of $1.4197, as bank sources said demand for the Greek issue had reached about 16 billion euros. [ID:nLDE60O11Z]

The euro pulled further away from a near six-month low hit against the dollar last week when concerns about Greece's heavy indebtedness saw heavy selling of the common European currency.

Analysts said the pair was also supported as it held above its 14-day moving average around $1.4130.

"I don't think this means we are going to have a meaningful rally in the euro, but the weak holders of euro shorts have clearly been knocked back," added Monument's Oswald.

The single currency fell to $1.4029 last week -- its weakest since late July -- when investors dumped the euro due on growing concerns about Greece's debt problems.

Greece has been trying to convince markets it can manage its ballooning debts. The syndicated sale of five-year bonds was seen as an important test of investor demand.

Commodity Futures Trading Commission data released on Friday showed net euro short positions rose to 25,282 in the week ended on Jan. 19 from 17,917 the previous week. [ID:nN22167602]

The euro also briefly rose above 128.00 yen , moving further away from a nine-month low of 126.55 yen hit on trading platform EBS on Friday.

The dollar was up 0.4 percent to 90.27 yen.

DOLLAR EASES

Reports embattled Federal Reserve Chairman Ben Bernanke was edging closer to winning confirmation to serve a second term also calmed markets, dimming the dollar's safe-haven appeal, after his prospects were seen as shaky last week. [ID:nN24141266]

The Australian and New Zealand dollars recovered from their weakest versus the U.S. unit in roughly a month, hit last week when signs of growth in China and Beijing's moves to curb bank lending were seen setting the stage for further monetary tightening.

Commodity-linked currencies had suffered as investors speculated that moves to rein in rapid growth may cut demand for natural resources in China

Analysts said investors would follow developments in U.S. President Barack Obama's crackdown on U.S. banks announced last week as the market gauges its potential impact on the dollar.

The Australian and New Zealand currencies each rose 0.7 percent against the U.S. dollar. Versus a currency basket, the dollar <.DXY> was down 0.1 percent on the day at 78.169.

The euro traded at 1.4727 francs, pulling away from a 10-month low around 1.4670 hit last week when Swiss National Bank Chairman Philipp Hildebrand said he would continue to prevent an excessive appreciation in the franc [ID:nLDE60L1YQ] (Additional reporting by Naomi Tajitsu)