* Euro under pressure as Greece package digested

* Euro down 0.5 pct at $1.3225 <EUR=>

* Holidays in Japan, China, UK keep volume light

* Aussie bounces after being hit by China tightening, levy

(Recasts, adds quotes, updates prices, changes dateline prvs SYDNEY)

By Tamawa Desai

LONDON, May 3 - The euro failed to hold initial gains on Monday made after European countries agreed to a 110-billion euro aid package to Greece at the weekend, on concerns about the plan and fiscal problems in the euro zone.

Market players said it was a classic case of “buy the rumour, sell the fact” as much of the announced package was anticipated before the weekend.

Trade was light due to holidays in Japan, China and the UK, reducing trading volume.

“Most of the news was already priced in, and expectations were fulfilled. However, it didn’t resolve any structural problems and I would suspect the euro would be ’sell on rallies’,” said Geoffrey Yu, currency strategist at UBS.

By 0827 GMT, the euro <EUR=> was at $1.3225, down 0.5 percent from late U.S. trade on Friday. It fell as low as $1.3207 in Asian trade, after rising to around $1.3359 earlier.

Traders reported stop-loss selling below $1.3220 with the single currency making an outside trading day on the charts, suggesting a bearish trend is in store. More stops are lined up around $1.3200, they said.

Further downside support was seen around the 1-year low of around $1.3112 hit last week.

Latest data from the Commodity Futures Trading Commission showed speculators had run up record short positions against the euro in the week to April 27 as uncertainty over the Greek debt crisis mounted. [IMM/FX].

HERCULEAN TASK

In exchange for aid, Greece has promised to carry out spending cuts and tax hikes worth 30 billion euros over three years, on top of belt-tightening measures already taken.

“The Herculean task ahead for the Greek government suggests that markets will not rest easy until there are credible signs of progress,” analysts at Credit Agricole CIB said.

The European Central Bank announced on Monday a suspension of collateral rules for Greek sovereign debt, indicating it would continue accepting Greek debt regardless of its rating. [ID:nLDE6420A9]

Spreads between Greek and German government bond yields narrowed on Monday. Spreads on Portuguese and Spanish bonds also fell. [ID:nLDE6420B0]

The euro also fell 0.4 percent against the yen at 124.18 yen <EURJPY=>, after dropping to 124.01 yen.

Growth-linked currencies such as the Australian dollar <AUD=D4> recouped earlier losses made in a knee-jerk reaction to China’s move to tighten policy.

The People’s Bank of China said on Sunday it was lifting lenders’ reserve requirement ratio by 50 basis points, effective May 10, its third increase of that magnitude this year. [ID:nSGE64200J]

The Australian dollar <AUD=D4> recovered from an early low of $0.9210 to trade at $0.9260, up 0.2 percent on the day.

Also, weighing on the Aussie initially was the Australian government’s plan to levy a super tax on resource companies of 40 percent [ID:nAUTAX].

The U.S. dollar rose 0.2 percent against the yen to 94.00 yen <JPY=>.