* Euro seen vulnerable as common solution proves elusive
* Some see single currency still on track to fall below $1.30
* Dollar/yen slips to 3-week low, technicals look weak
* Aussie holds slim gains despite RBA statement
By Hideyuki Sano
TOKYO, Dec 7 (Reuters) - The euro won a slight reprieve on Tuesday though it was still dogged by worries over debt problems in the euro zone, while the dollar slipped to a three-week low against the yen after breaking below key chart levels.
Although the euro drew some support in skittish trade from hopes that Ireland will pass an austerity budget later in the day, the currency remained vulnerable with European policymakers bickering over how to tackle the region's debt crisis.
Complicating the picture, however, was the dollar's own weakness after the Federal Reserve's chief did not rule out further bond purchases -- a theme that sent the greenback to an 11-month low last month.
"There are many people out there who are still bearish on the euro. But I think the market has been looking a bit too far ahead recently," said Minoru Shioiri, chief forex manager at Mitsubishi UFJ Morgan Stanley Securities.
"I do not see a debt domino-effect hitting Spain now. That may happen some time in the future but not now. The fact that 10-year Spanish bond yields have moved more than 50 basis points in just a couple of days shows just how far the markets have gone to an extreme," he added.
The euro rose 0.3 percent in Asia to $1.3345, having risen a full cent from Monday's low of $1.3246. Support at around $1.3268, a level representing a 61.8 percent retracement of its September to November rally, is proving solid for now.
Still, testing Friday's 10-day high of $1.3438 and major resistance in the $1.3446-3470 area looks difficult, given the persistent worries over euro zone debt problems.
Societe Generale strategists said it was still on track for a move below $1.3000, unless $1.3450 breaks.
IRISH BUDGET
The Irish budget outcome due later on Tuesday was shaping up to be the next focal point for markets, with some participants still cautious about the potential for negative surprises.
"If the (Irish) parliament fails to approve proposals, we could see a fresh flare-up in euro zone tensions and the euro could fall sharply against major forex counterparts," said David Rodriguez, a strategist at DailyFX.
The IMF urged euro zone finance ministers to increase the size of a 750 billion euros ($1 trillion) bailout mechanism for debt-stricken members, but Germany, Europe's biggest economy, rebuffed calls for a bigger financial safety net or joint euro bonds.
The inability of the region to come up with a common solution saw investors give the euro a wide berth, sending it to a record low against the Australian dollar at around A$1.3415 late on Monday.
For the dollar, traders said the fact the U.S. Federal Reserve could end up buying more than it's initially announced target of $600 billion in government bonds, as suggested by Fed Chairman Ben Bernanke on Sunday, meant it was not out of the woods yet.
That view manifested itself most clearly in dollar/yen, which fell to a three-week low of 82.34 yen, after Bernanke's comments helped it to break out of a rough 83.50-84.50 range.
The dollar fell below its 55-day moving average at 82.53 yen. On the ichimoku chart, having broken below the top of cloud on Friday, it fell below the kijun line at 82.44 yen on Tuesday.
Some traders say a fall below 82 yen is now possible, with the bottom of the cloud at around 81.70 seen as a major support.
"The U.S. jobs data was weak. Although Bernanke's comments initially offset the impact of the weak jobs data, investors could become more risk averse if we see another weak economic figure or two," said a trader at a Japanese bank.
The dollar index, which tracks the greenback's performance against a basket of major currencies, fell 0.2 percent to 79.430, having fallen in the last three sessions.
INDEX SUPPORT
Support for the index was pegged at 79.226, the 38.2 percent retracement of last month's rally from an 11-month low of 75.631 hit on Nov. 4 in the wake of the Fed's announcement it would buy $600 billion Treasuries.
Prospects of greater injections of liquidity by the Fed kept commodity prices underpinned. The 19-commodity CRB index, a global benchmark for the asset class, rose for a fourth session on Monday to four-week highs. It was not far off a two-year high set last month.
This helped commodity currencies such as the Australian dollar hold on to most of the gains made recently.
The Aussie last traded at $0.9911, not far off a two-week high of $0.9938 set on Friday. It dipped slightly after the Reserve Bank of Australia (RBA) kept rates on hold at 4.75 percent and said inflation would be little changed over next few quarters.
"They are fairly comfortable with where things are and where the economy is heading, suggesting no great need to rush in with another rate rise ... We have February pencilled in at the moment (for the next rate hike), but that sounds a little soon and we may have to push that back a bit. Sometime in the first half of next year," said Michael Blythe, chief economist at Commonwealth Bank in Sydney.
The Aussie also quickly recovered from initial losses from talk about Chinese tightening.
Official Chinese Securities Journal reported on Tuesday that China's central bank may raise interest rates this weekend to enshrine its shift to a "prudent" monetary policy in the face of rising inflation. (Additional reporting by Ian Chua in Sydney and Reuters FX analysts Krishna Kumar in Sydney and Rick Lloyd in Singapore; Editing by Joseph Radford)