FOREX-Euro nears two-month low before Greece vote, U.S. election

* Euro falls below 200-day moving average, more losses likely

Concerns before Greek austerity vote dent sentiment

* U.S. election uncertainty underpins dollar

By Wanfeng Zhou

NEW YORK, Nov 5 (Reuters) - The euro fell to a near two-month low against the dollar on Monday on uncertainty over a Greek vote on reforms needed to secure international aid and as investors awaited the U.S. elections on Tuesday.

The technical outlook for the euro was also bleak after the currency broke below its 200-day moving average, suggesting further near-term losses.

Greece's government will present the latest austerity package needed to secure international aid to parliament on Monday but will struggle to get it approved in a vote expected on Wednesday.

Approval of the reforms and the passage of the 2013 budget are crucial to unlocking 31.5 billion euros in aid from an International Monetary Fund and European Union bailout that has been on hold since the summer.

``The concern remains the euro debt crisis and the continuing problems regarding Greece,'' said Matthew Lifson, senior trader and analyst at Cambridge Mercantile Group in Princeton, New Jersey.

The euro as low as $1.2765 on Reuters data, breaking below a reported options barrier at $1.2800 and stop loss sell orders at $1.2780 to mark its lowest since Sept. 11. It was last at $1.2783, down 0.4 percent on the day. Traders said if Greece failed to pass the reforms package, the euro could drop to $1.2625/50.

Having broken below the 200-day moving average around $1.2828, chartists said the euro could face further losses, although near-term support is seen at the Sept 11 low of $1.2753.

If the euro closes below the 200-day moving average it would be the first time since September and could signal a departure from its recent $1.28-$1.32 range.

Euro weakness drove the dollar to a two-month high against a basket of currencies. The dollar index rose as high as 80.843 , the strongest since Sept. 7, and last rose 0.2 percent to 80.769.


Uncertainty about the U.S. election, in which incumbent Barack Obama and Republican Mitt Romney are neck and neck in the polls, encouraged safe-haven flows into the U.S. currency.

With the Republicans seen retaining control of the House of Representatives, victory for Obama would be seen as raising the risk of policy paralysis over the 'fiscal cliff'.

If Congress cannot agree new arrangements, about $600 billion in government spending cuts and higher taxes will kick in early next year, all of which could hurt U.S. economic growth and underpin safe-haven assets.

The yen, often sought after during times of uncertainty, gained. The dollar slipped 0.2 percent to 80.26 yen, having hit a four-month high of 80.67 yen on Friday, around a 50 percent retracement of its decline from March to September.

``Dollar/yen is the most sensitive to the outcome of the U.S. elections,'' said Beat Siegenthaler, currency strategist at UBS in Zurich. ``While expectations of a Romney win has helped the dollar rise above 80 yen, there has been some paring back of those (expectations).''

He added an Obama win could cost the dollar some of its recent gains although in the medium term if U.S. data signalled an economic recovery, the dollar would benefit against the yen.

Some in the markets say Romney is opposed to the Federal Reserve's bond-buying program, which has anchored yields. So if he won Treasuries could sell off, driving yields and the dollar higher.

Danske's Rasmussen said he favored buying the dollar on any dips against the yen, given that the Bank of Japan ``has really shown it is ready to be more aggressive and we see Japanese exporters struggling''.

Japanese corporate earnings have been soft. Third-quarter economic output data, due on Nov. 11, is likely to show the economy contracted sharply, a factor likely to weigh on the yen.