Jan. 31 (Bloomberg) -- The euro may strengthen 0.3 percent against the dollar, extending its best start to a year since the currency’s creation, as long as it doesn’t dip below an area of so-called support, ING Bank NV said, citing trading patterns.
While the 17-nation euro will pare some of its 2.9 percent gains since December, it may rebound to $1.3615 if it stays above $1.3425, Roelof-Jan Van Den Akker, a senior technical analyst in Amsterdam, wrote in an e-mailed note.
“We recommend buying each dip to the support area,” Van Den Akker said in the note.
The euro was little changed against the dollar at $1.3576 as of 4:27 p.m. London time, after rising as much as 0.7 percent to $1.3587 yesterday.
“In coming days, we are expecting a consolidation of yesterday’s solid gains, suggesting a consolidation above the $1.3485-$1.3425 support area before the uptrend continues,” Van Den Akker wrote.
Support is an area on a price graph at which technical analysts expect buy orders to be clustered.
The single currency is the top performer this year among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Currency Indexes, having appreciated 2.9 percent.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a bond, commodity, currency or index.
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