Euro extends gains vs dollar, tests 200-day moving avg

The euro rose against the dollar on Wednesday, building on earlier gains seen after solid demand at a Portuguese government bond auction.

But while the euro was up 0.7 percent at $1.3060 EUR=, it has failed so far to break above its 200-day moving average, which Reuters data puts at $1.3070. A solid break above that level would be a first step toward improved euro sentiment, traders said.

And even then, further euro buying probably would not take the currency much further than $1.31 or possibly $1.3150 in the near term, traders added, as worries about the euro zone debt crisis continue to linger in financial markets. more