Euro May Fall to Lowest in Two Years on ‘Bear Trend’: Technical Analysis
Euro May Fall to 2-Year Low on ‘Bear Trend’
Simon Dawson/Bloomberg
The euro traded at $1.3134 as of 9:42 a.m. in Tokyo from $1.3130 in New York yesterday, when it fell to as low as $1.2974, the weakest since Jan. 25.
The euro traded at $1.3134 as of 9:42 a.m. in Tokyo from $1.3130 in New York yesterday, when it fell to as low as $1.2974, the weakest since Jan. 25. Photographer: Simon Dawson/Bloomberg
Feb. 16 (Bloomberg) -- Hans-Guenter Redeker, head of global currency strategy at Morgan Stanley, discusses the outlook for the euro and dollar amid central bank liquidity measures in Europe and the U.S. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Source: Bloomberg)
The euro may fall toward its lowest level in more than two years against the dollar after dropping below a key support level, Bank of America Corp. said, citing trading patterns.
The 17-nation currency’s slide below $1.3026 yesterday confirmed its decline through the 21-day moving average and signals a “larger bear trend,” according to a report by MacNeil Curry, the bank’s New York-based head of foreign- exchange and interest-rates technical strategy.
“The subsequent close through the 21-day and break of $1.3026 intra-day pivot points to a resumption of the larger bear trend targeting $1.2644/$1.2510 area support,” Curry wrote in the research note published yesterday. Support is where buy orders may be clustered.
The euro traded at $1.3134 as of 9:42 a.m. in Tokyo from $1.3130 in New York yesterday, when it fell to as low as $1.2974, the weakest since Jan. 25. The $1.2644 level was last seen on Jan. 16, when the currency retreated to $1.2626. The euro last touched $1.2510 on July 6, 2010, when it weakened to $1.2480.
The shared currency’s 21-day moving average was at $1.3137. Its moving average convergence/divergence, or MACD, was at 0.0036, below the signal line of 0.0045, according to data compiled by Bloomberg. A reading below the signal line indicates the euro may decline.
MACD is a gauge of momentum and is calculated by subtracting the 26-day exponential moving average from the 12 day average. The signal line is a nine-day exponential moving average of the MACD , and provides buy and sell signals.
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 reporter on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
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