* Euro helped by data showing surge in German exports
* Sovereigns buy euro after Friday's late fall to 3-wk low
* Greek debt worries and long positions cloud outlook
(Adds detail, updates prices)
By Anirban Nag and Neal Armstrong
LONDON, May 9 (Reuters) - The euro bounced on Monday as Asian and Middle East sovereign investors scooped it up after last week's selloff, although bloated long positions and euro zone debt worries pointed to downside risks.
Technical indicators also suggested the euro could ease, although a rebound in some commodities after their rout last week helped risk appetite and ensured the single currency stayed well above a three-week low hit against the dollar last week.
The euro continues to be supported by favourable rate differentials with the European Central Bank expected to raise interest rates further this year. A record surge in German exports in March showed its recovery remained on track, helping to support the single currency.
However, with data showing bullish bets on the euro rose to their highest since July 2007 and concerns over Greek debt returning to the fore, the currency's outlook remained uncertain.
"The latest euro rebound notwithstanding we suspect that it would take a more lasting resolution of the problems of the euro periphery to see it returning to its recent highs against other G10 majors," said Valentin Marinov, fx strategist at Citi.
The euro was up 0.5 percent at $1.4385, after a 3.3 percent fall in the past two sessions took it to a three-week low around $1.4310. It fell late on Friday following a German news report, which was later denied, that suggested Greece had raised the possibility of leaving the euro zone.
Jean-Claude Juncker, head of the group of euro zone finance ministers, late on Friday dismissed a report in Germany's Spiegel Online magazine that Greece could withdraw from the 17-member euro zone.
While few market players think Greece is likely to drop out of the euro, the European Union is under pressure to renegotiate its financial bailouts of Ireland and Greece with an Irish minister saying any concessions given to Athens should mean better terms for Dublin as well.
"The Greek situation is like a slow motion car crash. The politicians know they have to dip into the pockets to find a solution to the problems facing Greece," said Jeremy Stretch head of currency strategy at CIBC World Markets.
Chartists say a break below the euro's 50-day moving average at $1.4279 could signal a broader correction lower towards $1.4020/30, the lows struck on March 28.
The euro gained 0.7 percent to 116.20 yen, rebounding from a five-week low of 115.23 yen on Friday.
Meanwhile, the dollar was up 0.1 percent at 80.74 yen, off last week's seven-week low of 79.57 yen, and not far from Friday's high of 80.95 yen hit after upbeat U.S. jobs data.
Friday's data showed U.S. employers added 244,000 jobs last month, well above expectations. The dollar index was down 0.3 percent at 74.591.
The data also helped to underpin risk appetite, boosting higher-yielding currencies such as the Australian dollar. Commodity currencies were supported on Monday by a rebound in oil prices, after a plunge in oil, silver and other commodities last week triggered profit taking.
The Australian dollar rose 0.6 percent to $1.0755, extending gains on Friday after the Australian central bank said rate hikes would be needed in future to contain inflation.
(Editing by Susan Fenton; Editing by Toby Chopra)