NEW YORK, March 11 (Reuters) - U.S. cotton futures settled higher Friday on investor buying to end a three-day losing streak, as fiber contracts bucked early weakness in the commodities sector from the massive quake in Japan, analysts said.

The key May cotton contract on ICE Futures U.S. rose 3.96 cents to finish at $2.0494 per lb, trading from $1.966 to $2.0798. On the week, the market was down 3.65 percent. It was the first weekly loss for cotton futures in 9 weeks.

(Graphic:http://link.reuters.com/kaf58r)

Traders said activity was dominated by technical considerations. The market's session low of $1.966 is roughly the 50 percent correction in the market from the Feb. 25 low of $1.7815 to the Monday top of $2.197.

"Without a doubt, this is a technical rebound," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana. He said once the May contract hit $1.966, it headed back the other way on short-covering by technical players.

The quake in Japan may have had a knock-on effect in the market's early downturn, but it was largely shrugged off by players whose attention was focused on something else, dealers said.

"We've ignored all the outside markets," said Stevens. "We're trading the flow of money that comes in and out."

The result is that estimated volume traded Friday stood at about 24,000 lots, about a quarter below the 30-day norm, Thomson Reuters preliminary data showed. Open interest in the market, an indicator of investment exposure in cotton, stood at 175,025 lots as of March 10, up slightly from the 7-1/2 month low at 173,688 lots as of March 8, data from ICE Futures U.S. showed.

Analysts said the next bit of information which will provide direction for cotton futures would be the USDA's potential plantings data on March 31. That is the first government survey of likely plantings for major row crops like cotton, corn, soybeans and wheat in 2011.

Despite the rally in cotton, the fiber has to compete for acreage against similarly high-priced grains this year.