Head, Shoulders Signal Euro a Buy, BofA Says: Technical Analysis
February 10, 2012, 2:45 AM ESTBy Allison Bennett
Feb. 9 (Bloomberg) -- Investors should buy the euro against the yen after Japan’s currency completed a head-and-shoulders pattern, signaling further strength in Europe’s currency, according to Bank of America Merrill Lynch.
A break in the euro above 102.60 yen completes the pattern, which has taken shape over the past two months, and indicates the euro may rise to 106.82 yen to 108.23 yen by April, MacNeil Curry, head of foreign-exchange and interest-rates technical strategy at the Bank of America Corp. unit in New York, wrote in a research note to clients today.
A head-and-shoulders pattern is formed by three consecutive peaks on a chart, with the highest in the middle.
The euro appreciated 1 percent to 103.18 yen at 2:54 p.m. New York time after Greece’s political leaders said they had reached an agreement on austerity measures needed to obtain a bailout. The 17-nation euro touched 103.29 yen, the highest level since Dec. 12.
--Editors: Dennis Fitzgerald, Kenneth Pringle
To contact the reporter on this story: Allison Bennett in New York at abennett23@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
