Bollinger Band Shows Euro May Rise to $1.49, Bank of Tokyo Says

By Stanley White

Sept. 25 (Bloomberg) -- The euro may rise to $1.49 provided the currency stays above its moving average for the past five days, said Masashi Hashimoto, a foreign-exchange analyst at Bank of Tokyo-Mitsubishi UFJ Ltd. in Tokyo.

Resistance at $1.49 is near the upper Bollinger band on the euro's daily chart. Bollinger bands are two standard deviations above and below the average price of a currency or security over the past 20 days. A standard deviation measures how tightly prices are clustered around the average level. Resistance is a level where sell orders may be clustered.

``The euro is showing signs of stabilizing above its five- day moving average,'' Hashimoto said. ``That suggests it has the potential to grind higher in coming days.''

The euro rose to $1.4725 at 2:14 p.m. in Tokyo from $1.4621 late yesterday in New York. Since reaching a one-year low of $1.3882 on Sept. 11, the euro has gained 6 percent.

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 on this story: Stanley White in Tokyo at swhite28@bloomberg.net