The euro touched  four-month lows against the dollar on Monday after stops were  triggered in thin trade against the backdrop of mounting  worries about Europe's debt crisis.

The single currency fell to lows not seen since  mid-September, slipping as deep as $1.2860 on trading  platform EBS, after stops around $1.2900 and $1.2870 were  triggered.

Although the euro later pared its losses on  short-covering, market players said the single European  currency still looked vulnerable, due to worries about the  level of demand at euro zone debt auctions coming up this week.

"I think overall the path of least resistance is going to  be the downside for the euro," said Andrew Robinson, currency  market strategist for Saxo Capital Markets in Singapore.

Since the euro breached its 200-day moving average last week,  the next downside target may be the 61.8 percent retracement  of its rally between June to November of 2010 that comes in  right below $1.2800, Robinson said.

The euro last stood at $1.2915, up 0.1 percent from late  U.S. trading on Friday.

The common currency had already been under pressure last  week, falling from a peak of $1.3435 on Jan. 4, as investors  sold peripheral euro zone bonds ahead of new debt supply from  the likes of Portugal and Spain this week.  - Reuters