The dollar is poised to strengthen as much as 2 percent against the Swiss franc after breaking through an area of so-called resistance, Commerzbank AG, citing trading patterns.
The U.S. currency this week climbed above a six-month trend line drawn from the July 24 high, paving the way for further gains, Karen Jones, head of foreign-exchange, fixed-income and commodities technical analysis in London, wrote today in a note to clients.
“We look for further gains on the topside,” Jones wrote. The next targets are the 200-day moving average at 94.32 centimes, the November high of 95.13 centimes and the 50 percent retracement of the decline from July to January at around 95.25 centimes, she said, referring to so-called Fibonacci analysis.
The dollar rose 0.3 percent to 93.41 centimes as of 3:25 p.m. London time after appreciating to 93.55, the strongest level since Dec. 11. The last time it traded at 95.25 centimes was on Sept. 7.
The greenback may encounter resistance around the 55-week moving average currently at 93.66 centimes, Jones said.
Resistance refers to an area on a graph where analysts expect sell orders to be clustered. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.
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