(Repeats to fix technical glitch)
* Euro slips vs dollar, support at $1.3795-3805
* Dollar slips vs yen, support at Y81.80
* Yen gains ground on crosses
By Charlotte Cooper
TOKYO, Oct 12 (Reuters) - The dollar held its ground on the euro and a basket of currencies on Tuesday, showing signs it may retain gains near-term from a short-covering bounce as players take some short positions off the table.
The euro has struggled to clear $1.40
The speculative part of the market has become short dollars as it has factored in quantitative easing by the Federal Reserve in November. Market players say this means people will now be cautious about selling it aggressively from here and it could bounce if U.S. policymakers sound less dovish than expected.
"We're seeing a bit of a correction this morning and we could see more consolidation this week," said a senior trader at a European bank in Hong Kong, noting share markets were faltering.
"The way down for the dollar looks a bit limited in the short term ... but then I'd expect the dollar to continue lower."
Minutes from the Fed's meeting on Sept. 21, when it said it stood ready to provide more support for the economy and expressed concern about low inflation, are due at 1800 GMT and will be scrutinised for more clues on policymakers' thinking.
The euro slipped 0.1 percent to $1.3865
After that, the trader said he didn't rule out a move back down to $1.3650, back to levels seen early last week.
The dollar rose 0.1 percent against a basket of currencies <.DXY> to 77.507, not far from a nine-month low of 76.906 hit last week. It has now bounced off the 76.90 area twice and if the short-covering picks up steam, a target on the charts would be 78.68, the high of Oct. 5.
http://r.reuters.com/qun86p
PDF on "currency wars" http://r.reuters.com/gez77p
But for dollar/yen the going was heavy, with short-covering
there running out of steam as the yen gained ground on the
crosses. The dollar drooped 0.2 percent to 81.93 yen
"The question is just how much the buying interest from Japanese importers and wariness about intervention will help limit the downside," another trader said.
"From the perspective of speculators I think they will probably be looking to sell on rallies, at levels above 82 yen."
Still, wariness about intervention by Japan and the extent of short positioning stopped it falling too far. Support was expected at 81.80 and then 81.30.
"Investors, or market participants, are gradually finding it more difficult to make extra short positions in the U.S. dollar," said Yunosuke Ikeda, senior currency strategist at Nomura Securities.
"So if you see any kind of positive data or less pessimistic data, or less dovish statements from Fed officials then there is a potential for reversal of the dollar value trajectory."
The dollar dipped briefly on Monday to 81.37, a 15-year low. Traders say ultimately a test of 80 yen and the record trough of 79.75 yen is likely, but some saw scope short-term for a move up to 83.00 yen. Resistance was expected at 82.55-60 and then up at a former low, 82.87.
One trader at a Japanese bank said the dollar may now trade between 81.50 and 83.00 ahead of a meeting of G20 finance chiefs in South Korea later in October, when last weekend's discussions on currency policy are likely to be continued.
Tokyo escaped overt criticism from its G7 and G20 counterparts at the weekend for its yen-selling intervention in September. Finance Minister Yoshihiko Noda said after the meeting he gained understanding there that the action was aimed at countering excessive currency moves and not a prolonged, massive intervention aimed at driving down the yen to a certain level.
"The last line of defence might be 80, which is politically important because if the dollar/yen breaks that level it will reach the highest value of the yen against the dollar in history," Ikeda said.
"But ... this level of 82 is still intervention territory for the Japanese government."
The euro fell 0.2 percent to 113.63 yen