Euro May Fall to 149.28 Yen, Bank of Tokyo-Mitsubishi UFJ Says

By Ron Harui

Sept. 11 (Bloomberg) -- The euro may extend losses to 149.28 yen after it fell today to the lowest in almost a year, said Masashi Hashimoto, a currency analyst at Bank of Tokyo- Mitsubishi UFJ Ltd. in Tokyo, citing technical charts.

So-called support at 149.28 yen is the low on Aug. 17, 2007, according to Hashimoto. The currency is likely to keep weakening as momentum indicators such as the moving average convergence- divergence chart are still signaling to sell the euro, he said. Support is a level where buy orders may be clustered.

``The currency may fall to 149.28 yen in coming days, given the present pace of declines,'' Hashimoto said. ``There's a good chance that it'll drop below there, bringing 145.60 yen into focus.'' The 145.60 yen level is a 61.8 percent Fibonacci retracement of the euro's climb from the June 2005 low of 130.62 yen to the July high of 169.96 yen, he said.

The euro declined to 149.91 yen as of 1:45 p.m. in Tokyo from 150.75 yen late in New York yesterday. It reached 149.63 yen, the weakest since Aug. 17, 2007. The currency has fallen 11.8 percent since reaching its record high.

MACD charts can indicate whether a price shift is a change in trend or a short-term deviation by comparing moving averages based on nine-, 12- and 26-day periods.

Fibonacci analysis is a mathematical formula based on the theory that prices rise or fall by certain percentages after reaching a high or low. A break of one indicates a currency may move to the next. A failure suggests a trend may stall. Other Fibonacci points include 76.4 percent.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Resistance is where sell orders may be clustered, while support is where there may be buy orders.

To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net