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.