The euro may rise to around the highest level for this year, Mizuho Securities Co. said, citing trading patterns.
Losses in the 17-nation euro from the Sept. 17 high of $1.3172 have been curbed as the currency held above the 38.2 percent Fibonacci retracement level of its July-to-September gains, according to Kengo Suzuki, a currency strategist in Tokyo at the unit of Mizuho Financial Group Inc., Japan’s third-largest bank by market value.
“The euro’s short-term upward trend hasn’t collapsed yet,” said Suzuki. “If it breaks above $1.32 and confirms its bullish trend, it may strengthen, targeting around its February high in the next few weeks.”
The shared currency traded at $1.2984 as of 9:52 a.m. in Tokyo from $1.2968 at the close yesterday in New York. The year’s high is $1.3487 reached on Feb. 24, according to data compiled by Bloomberg.
Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. A break above resistance, or below support, indicates it may move to the next level. Support refers to an areas where buy orders may clustered. Resistance is where there may be orders to sell.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.