Exchange traded funds tracking the euro rose Wednesday as the dollar weakened against the common currency before a key meeting of European Union leaders on a new bailout package for Greece.

CurrencyShares Euro Trust (NYSEArca: FXE) gained 0.6% in afternoon trading. Investors are hoping EU officials can reach a deal that will stem the debt crisis as government bond yields rise near critical levels in Italy.

Dollar and euro ETFs have traded in a volatile range lately with currency markets looking for clarity in Europe and on the U.S. debt ceiling. Stock have also bounced within a range this year. [Euro ETFs See Bearish Break from ‘Flag’ Pattern]

“CurrencyShares Euro Trust is attempting to reinstate the triangle continuation pattern which appeared to dissolve on July 11. Triangles are notorious for false breakouts. Should trading close back above $142 a share, then the triangle will be back in play,” said Tarquin Coe, Investors Intelligence technical analyst.

“If that occurs, conditions would be healthier as the bear trap would have shaken out weaker longs and sucked in shorts,” he said. “That setup would allow the primary uptrend to reassert in earnest.”

Signs the euro is firming have helped ETFs that invest in Europe and single countries such as iShares MSCI Austria (NYSEArca: EWO).

The Austria ETF “has found support across $21 a share, a level which has cushioned all breakdown attempts this year,” Coe write in a newsletter Wednesday. The fund has a yield over 2% and is “heavily weighted towards financials but the worse-case scenario for that sector looks to be priced in for the time being and consequently we feel the risk is now to the upside.”

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.

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