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Euro May Rise to $1.35 After ‘Golden Cross’: Technical Analysis

Oct. 18 (Bloomberg) -- The euro may climb to more than $1.35 before the end of this year after trading above its 200-day average in the past month, Miller Tabak & Co. said, citing trading patterns.

Europe’s 17-nation currency may form a so-called golden cross, where the 50-day moving average goes above the 200-day average, as soon as Oct. 24 if the euro stays above $1.30, Andrew Wilkinson, chief economic strategist at Miller Tabak in New York, wrote in a client note dated yesterday. In technical analysis, a golden cross signals a bullish trend and occurs when a short-term moving average passes above a longer-term line.

The euro fell 0.2 percent to $1.3088 at 3:40 p.m. London time, snapping two days of gains that resulted in a 1.3 percent appreciation. The 50- and 200-day moving averages were $1.2762 and $1.2831, according to data compiled by Bloomberg. The euro last reached $1.35 in December.

In technical analysis, investors study charts of trading patterns and prices to predict changes in a security, currency or index.

To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net

To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

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