Euro May Advance to 150 Yen on Charts, Standard Chartered Says

By Ron Harui

Oct. 14 (Bloomberg) -- The euro may rise to 150 yen as technical charts that predict price movements show the past month's 9 percent decline in the 15-nation currency is becoming excessive, according to Standard Chartered Plc.

Momentum indicators such as relative strength index and stochastic oscillator charts are signaling the euro is ``close to bottoming,'' David Mann, a senior foreign-exchange strategist at Standard Chartered in Hong Kong, wrote in a research note today.

``The deeply oversold nature of momentum indicators on the daily charts should caution bears,'' Mann wrote. ``A pullback looks likely in the near term.''

Europe's single currency advanced to 139.15 yen as of 8:02 a.m. in London from 138.57 yen late in New York yesterday. It reached 132.24 yen on Oct. 10, the lowest since June 2005.


Initial resistance is between 145 yen and 147 yen, which is ``congestive and trend line'' resistance, Mann wrote. ``There should be some scope to test 150 if the corrective bounce extends,'' he said. Resistance is a level where sell orders may be clustered.

The euro's 14-day relative strength index is at 19.09, and its stochastic oscillator is at 4.71, both of which are ``deeply oversold,'' according to Mann.

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