The euro, which has advanced more than 4 percent against the yen this year, may “struggle” as it approaches 121.94, Credit Suisse Group AG said, citing trading patterns.
The so-called resistance level represents the 61.8 percent Fibonacci retracement from the June 2009 high to the July 2012 low, the bank said in a research note published today.
Credit Suisse’s euro target for 121.94 yen “is now within striking distance,” said strategists including London-based David Sneddon. “We envisage the market continuing higher towards this hurdle, but would expect the price to struggle once up there.”
If the euro does fall back, it will find support, or an area on a price graph where buy orders may be grouped, at 114.28, Credit Suisse said.
The euro rose 0.3 percent to 119.32 yen at 4:45 p.m. London time, after rising to 120.13, the highest level since May 4, 2011.
Fibonacci analysis is based on the theory that securities tend to rise or fall by specific percentages after reaching a high or low. Resistance is an area on a price graph where technical analysts anticipate sell orders to be clustered.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a bond, commodity, currency or index.