Euro May Stall at $1.5726 on Charts, Societe Generale Says

By Kosuke Goto

June 26 (Bloomberg) -- The euro's advance may stall at $1.5726 against the dollar, said Yuji Saito, head of foreign- exchange sales at Societe Generale SA, citing charts traders use to predict price movements.

The so-called resistance level of $1.5726 represents the upper side of a Bollinger band with a 21-day moving average, said Tokyo-based Saito. Resistance is a level where sellers are expected to outweigh buyers.

``The markets will be well conscious of that technical level as resistance,'' said Saito at France's second-largest bank by market value.

Europe's single currency traded at $1.5668 against the dollar as of 10:34 a.m. in Tokyo from $1.5666 in New York yesterday, when it rose to $1.5686, the highest level since June 9. The euro has gained more than 1 percent in the past week.

Bollinger bands are two standard deviations above and below the average price of a currency or security over the past 20 or 21 days. A standard deviation on a Bollinger band chart measures how tightly prices are clustered around the mean.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast price changes in a security, commodity, currency or index.

To contact the reporter for this story: Kosuke Goto in Tokyo at kgoto2@bloomberg.net.