LONDON (Reuters) - The euro fell on Friday, retreating from a one-month high against the dollar as a perceived lack of progress on a Spanish bailout request curbed demand for the single currency. Expectations Spain will ask for a bailout helped the euro rally this week, but uncertainty about when such a request might come has made investors wary of driving it beyond the top of its recent trading range. Spain's Prime Minister Mariano Rajoy said on Friday no decision had been taken yet on seeking aid. The euro was down 0.2 percent on the day at $1.3045, pulling well away from a peak of $1.3140 hit on Wednesday, its strongest since mid-September. But it kept comfortably within the $1.28 to $1.3170 range it has traded in for the last month. "From a short term perspective, we might see a bit of a consolidation here into the next 10 days or so," said Kiran Kowshik, currency strategist at BNP Paribas. Traders reported bids around $1.3000-1.3020 that could provide support and limit any falls. Kowshik said he broadly expected the euro to move higher as long as it remains above chart support at its 200-day moving average, currently at $1.2832. There was some more positive news from a European summit on Thursday and Friday, with leaders moving closer to establishing a single euro zone banking supervisor though they did not give precise details on how it would work. German Chancellor Angela Merkel warned, however, it would take more time to develop the new system. "We are missing the decisive news that might push us out of this range. It is most likely going to be some political news like a move from Spain," said Ulrich Leuchtmann, head of FX research at Commerzbank. Traders were also wary before regional elections at the weekend in Galicia, where Prime Minister Mariano Rajoy's party may get punished by voters protesting about his handling of the debt crisis, and in the Basque country. SPAIN FOCUS A bailout request from Spain would prompt the European Central Bank to buy Spanish bonds and drive down Madrid's borrowing costs, buoying demand for the euro and perceived riskier currencies. The single currency was on track to end the week up 0.7 percent against the dollar and almost 2 percent higher versus the yen. Investors have unwound bets against the euro as the perceived risk of the currency bloc breaking up diminished. But strategists said many remained cautious and were looking to profit by selling the euro near the top of the range. "Our survey of euro/dollar positioning suggests a market betting on a wide range trading environment strategically, while tactically looking to sell euro/dollar on rallies," Societe Generale strategist Sebastien Galy wrote in a client note. Easing worries over the euro zone and some recent strong U.S. data has helped keep the safe-haven yen near five-month lows versus the euro and a two-month trough against the dollar. The dollar traded down 0.1 percent at 79.18 yen but was near a two-month high of 79.47 yen set on Thursday, while the euro fetched 103.33 yen, having hit a five-month high of 104.145 yen on Thursday. Speculators have recently sold the yen on expectations the Bank of Japan will take another easing step at its policy meeting on October 30, following up on its easing last month. But the dollar's advance may slow as Japanese exporters are waiting to sell, with resistance at the 79.66 yen August peak.

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