FOREX-ECB comments hit euro, but impact limited

(Updates prices, adds more comment)

* Euro dips after ECB flags easing option

* Comments by Draghi, others seen capping any euro gain for now

* Dollar pulls back from lows versus yen but still shaky

* Ukraine, stocks, Chinese data in focus this week

By Patrick Graham

LONDON, April 14 (Reuters) - The euro retreated around half a percent on Monday from close to 2014 highs against the dollar after the European Central Bank's strongest signal yet that it will act to head off further gains.

Six years of debt and banking crisis have laid bare how countries like Greece, Spain and Portugal suffer from a currency that will not easily fall thanks to the capital rolling into Germany, the Netherlands and other stronger economies.

Yet, aside from regular broadsides from France, ECB policymakers have not focused much attention on the currency's level. With prices falling in many of the bloc's southern states, that seems to be changing.

ECB President Mario Draghi said in Washington on Saturday that "a further strengthening of the exchange rate would require further stimulus". Bank of France chief Christian Noyer hammered home the message on Monday saying: "The stronger the euro is, the more accommodative policy is needed."

Investors read that as a strong hint that outright money-printing could follow soon and the euro weakened against the dollar yen and sterling in response.

Yet, even with increased tensions in Ukraine in the mix, it remained within a cent of 2014 highs above $1.39.

"What is telling is the extent to which the euro is strong even in the face of all of this," Simon Derrick, head of strategy with Bank of New York Mellon in London, said.

"I'd be daft to say the euro might not weaken a bit further in the next 24 hours or so, but after that I think we certainly will be having another look at $1.39 and $1.40."

The euro traded at $1.3827, having tested support just above $1.3810. It was at 140.66 yen and near one-month lows at 1.2147 Swiss francs.

"We would look to sell any rallies in the euro today," said a London-based trader with a Scandinavian bank. "It does not seem as if the ECB will tolerate levels any higher than where we are."

"There is resistance around $1.3800-1.3820. If that breaks we may head for the low $1.37s."

The dollar's failure to rise has been the main surprise of a stolid first quarter on major currency markets, many banks predicting as 2014 began that the reining in of U.S. monetary stimulus would be a trigger for it firming against the euro.

While participants say the market is convinced some form of further stimulus from the ECB that adds to the number of euros in circulation is inevitable, other factors like demand for peripheral euro zone debt underpin the single currency.

BNY Mellon's Derrick also pointed to signs of central banks shifting funds to euros from dollars. Traders say that some Asian central banks who intervened against their currencies in recent weeks have been exchanging some of the dollars gained.

BUOYANT YEN

The dollar inched up to 101.730 yen from last week's trough of 101.30, but remained on the back foot after dropping 1.6 percent last week.

Market players said the dollar saw some reprieve from reports that Prime Minister Shinzo Abe would meet Bank of Japan Governor Haruhiko Kuroda during the month. This helped stoke expectations for further monetary easing by the central bank.

"The reports have helped the dollar but support is likely to melt away unless the meeting actually results in concrete steps," IG Securities market analyst Junichi Ishikawa said.

Escalating tensions in Ukraine and jitters around the sell-off in technology stocks supported the yen as a traditional safe haven.

"Wall Street's performance will remain a key driver for the dollar and yen. Near-term focus is on 101.20 yen. It appears significant bids for the dollar are lined up there, and a break below that level is likely to trigger significant covering of yen shorts," Ishikawa said.

(Additional reporting by Ian Chua in Sydney and Shinichi Saoshiro in Tokyo, Editing by Louise Ireland and Nigel Stephenson)