(Bloomberg) -- Investors should sell the euro against the dollar as the currency mimics a pattern that took it to a one-month low on April 22, according to a Citigroup Inc. research report analyzing chart formations. The euro fell from $1.3739 on March 19 to $1.3114 on March 30 and resumed gains to peak on April 6 at a 76.4 percent Fibonacci level, the report said. It dropped again, then retraced 61.8 percent of that decline, only to resume a drop that led to an “aggressive” move lower, technical analysts Tom Fitzpatrick in New York and Shyam Devani in London wrote. The currency is repeating that pattern and is poised to fall to $1.3318 from its June 3 high of $1.4338, they said. “This looks to us like the setup seen in March-April,” the analysts wrote. “This overall move down is expected to test the 200 day moving average.”
The euro rose 1.2 percent to $1.4043 today, erasing two days of declines. It climbed against 10 of the 16 most-traded currencies tracked by Bloomberg. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. A breach of one level indicates the currency may move to the next.
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