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Citigroup Exits Bet on Euro as Resistance Level Holds: Technical Analysis
Citigroup Inc. is abandoning its long position on the euro “for now” after the currency failed to rise above a key technical resistance level.
The shared currency rallied today to $1.3107, the strongest level in almost three months, stopping short of advancing beyond a range of $1.3080 to $1.3115.
The range represents a “plethora of resistance” that the euro has faced in the past 18 months, analysts led by New York- based Tom Fitzpatrick said in a note to clients. A long position is a bet that the price of an asset will rise.
“We have been trying to push through those levels all morning without success,” Fitzpatrick wrote. “As a consequence, we are going to exit our recent euro-dollar long here at $1.3071.”
The euro appreciated 0.7 percent to $1.3081 at 2:52 p.m. in New York, from $1.2995 yesterday. Citigroup will re-establish its long euro position if the currency falls further or if it closes above $1.3115.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. A resistance level is an area on a chart where orders to sell a currency versus a counterpart may be placed, potentially blocking an advance.
To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net
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