* ECB buying of euro zone debt eases market panic
* Euro may have bottomed out near-term
* Some traders say strong U.S. jobs figure could boost dlr
By Hideyuki Sano
TOKYO, Dec 3 (Reuters) - The euro retained its momentum on Friday, keeping gains made after talk the European Central Bank aggressively bought euro zone periphery debt, even though it avoided explicitly committing itself to ramping up bond buying.
The immediate focus of the market moved to U.S. payrolls data later in the day, with surprisingly strong U.S. housing numbers adding to budding optimism on the U.S. economy.
The euro nestled at $1.3210, floating well above a 2-½ month low of $1.2969 plumbed on Tuesday in the wake of panic selling in euro zone periphery government bonds.
"I suspect the euro has bottomed out in the near term and will test $1.33-34," said a trader at a Japanese brokerage house.
Its 100-day moving average, at around $1.3327, is seen as the next resistance level. Although more important resistance lurks in the $1.3334-64 area, its August peak and a 38.2 percent retracement of its June-November rally.
Traders said the ECB was buying Portuguese and Irish debt, pushing down yields on euro zone periphery countries' bonds. That calmed investor panic over euro zone debt for now, helping the single currency.
That offset initial disappointment after ECB President Jean-Claude Trichet did not announce a more aggressive policy response to the euro zone debt crisis.
As widely expected, the ECB extended nonstandard provisions, committing to provide unlimited one-week, one-month and three-month funding for vulnerable banks until at least April.
LOOKING TO JOBS
Traders are now looking to the U.S. jobs data, which is expected to show an increase of 140,000 jobs last month, according to a Reuters survey.
Although data on Thursday showed initial jobless claims rose more than expected, anecdotal evidence of strong holiday sales and a surprise jump in house sales index on Thursday are boosting investor risk appetite.
Some traders said a strong U.S. jobs figure is likely to encourage more risk appetite, which could help the euro.
But others said it would likely be the U.S. dollar that benefits from a strong number this time given the perception that euro zone debt woes are far from solved.
"Many investors outside Europe, including Asian investors, may still want to reduce euro zone government debt holdings," said another trader at a Japanese bank, noting that there has been persistent selling in euro/yen.
Euro/yen dipped 0.1 percent in early Friday to 110.57 yen. Though it kept some distance from a 2-½ month low of 108.33 yen hit earlier in the week, it could face strong resistance around 111.65 yen, where its 14-day and 90-day moving averages are converging.
The dollar changed hands at 83.72 yen, off Monday's two-month high of 84.41 yen. Strong support is seen at the top end of the pair's ichimoku cloud at around 83.18.
While option triggers at 84.50 and 85.00 as well as offers from Japanese exporters are seen hampering the dollar's advance, if the payroll data boosts U.S. bond yields further, that could help the dollar test those resistance levels, traders said.
The Australian dollar hovered at around $0.9755, up more than two percent from Wednesday's two-month low of $0.9536.
Its 55-day moving average, which comes in at around $0.9803, could be seen as a possible target. (Additional contribution from Reuters FX analyst Rick Lloyd in Singapore; Editing by Joseph Radford)