By Yoshiaki Nohara and Shigeki Nozawa
Oct. 23 (Bloomberg) -- The euro may extend its three-month rally to reach $1.53, according to Tokai Tokyo Securities Co., citing trading patterns.
The 16-nation currency, which rose above $1.50 on Oct. 21 for the first time in 14 months, is now on course for $1.5163, a level that represents a 76.4 percent Fibonacci retracement of its decline from $1.6038 in July 2008 to $1.2330 on October 2008, said Yoh Nihei, a trading group manager at Tokai Tokyo.
“The euro finally passed $1.50, which was a key psychological level,” Tokyo-based Nihei said in an interview with Bloomberg yesterday. “There’s still room for the currency to advance. It is also likely to keep rising next year.”
The euro traded at $1.5029 as of 7:35 a.m. in Tokyo, having advanced 2.7 percent this month.
Daily momentum indicators such as moving average convergence/divergence also show buy signals, Nihei said. Should the euro strengthen above $1.5163, it may climb to $1.53 by year-end, the highest level since Aug. 8, 2008, he said.
Fibonacci analysis is based on a theory that prices rise or fall by certain percentages after reaching a high or low. A break above resistance or below support indicates a currency may move to the next level. Other significant numbers include 38.2 percent, 50 percent and 61.8 percent.
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.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.
To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Shigeki Nozawa in Tokyo at Snozawa1@bloomberg.net.
Posts
No comments:
Post a Comment