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Euro May Drop to Five-Month Low on Fibonacci: Technical Analysis

April 2 (Bloomberg) -- The euro is poised to drop to the lowest since November against the dollar, IG Markets Securities Ltd. said, citing trading patterns.

“Attention is on the March 27 low of $1.2750,” Junichi Ishikawa, an analyst at IG Markets in Tokyo, wrote in a research note today. “If that support is broken, there are no noteworthy technical points until the $1.26 level.”

At $1.268, Ishikawa points to the 62 percent retracement on the Fibonacci chart from the Feb. 1 high of $1.3711 to the July 24 low of $1.2043. Fibonacci analysis theorizes that prices rise or fall by certain percentages after reaching a new high or low.

The next level the euro could target is the Nov. 13 low of $1.2662, Ishikawa wrote.

The euro was little changed at $1.2848 as of 8:48 a.m. in London from yesterday. The 17-nation currency has fallen 2.6 percent this year.

In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. Support refers to an area on a chart where analysts anticipate orders to buy may be clustered.

To contact the reporter on this story: Kevin Buckland in Tokyo at

To contact the editor responsible for this story: Rocky Swift at

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