The euro may strengthen to a seven- month high against the dollar should it stay above a level of so-called support, ING Groep NV said, citing trading patterns.
The 17-nation currency is poised to halt recent declines as long as it remains higher than its 50-day moving average, currently at $1.2918, and its 200-day average of $1.2785, according to Roelof-Jan van den Akker, a technical analyst at ING in Amsterdam. Should it hold above those the euro will rise toward $1.3172, the high of Sept. 17, he said.
“The market needs to find a bottom, and support comes in between these two lines,” van den Akker said today in a telephone interview. “I’m looking for a reversal around that area, from where the next rally should start.”
The euro appreciated 0.1 percent to $1.2936 at 8:57 a.m. in New York time after falling as low as $1.2881. The high reached on Sept. 17 was the strongest level since May 4.
Support refers to an area on a price graph where orders to buy an asset may be clustered.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.
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