The Dollar Index is headed for a two-month low after the currency gauge dropped below its 100-day moving average, Nomura Holdings Inc. said, citing trading patterns.
The index, which Intercontinental Exchange Inc. uses to track the U.S. currency against its six major counterparts, slid as much as 0.8 percent to 78.488 yesterday, below its 100-day moving average of 78.747.
“When it breaks through its 100-day moving average, it tends to continue lower,” said Kurt Magnus, executive director of currency sales in Sydney at Nomura, Japan’s biggest brokerage, referring to the Dollar Index. “Pension funds and real-money managers, who manage foreign exchange -- a lot of them look at 100-day moving average.”
The Dollar Index was little changed at 78.559 as of 9:21 a.m. in Tokyo. Magnus said the gauge will fall to 78.15, which would be the lowest since Dec. 8.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.