(Bloomberg) -- The pound will probably fall to the lowest in a month against the yen after failing to break above resistance at its 76.4 percent retracement level, Citigroup Inc. said in a research report citing charting patterns.The U.K. currency depreciated today against 15 of its 16 major counterparts after government data showed the economy shrank in the first quarter by the most since 1958. The pound erased an earlier gain versus the yen, retreating from a two- week high on concern the nation may take longer to emerge from its recession.Sterling peaked at 160.29 yen today, below the 160.55 level that Citigroup said marks the 76.4 percent Fibonacci retracement of the currency’s decline from its June 12 high to the June 23 low. The pound is heading toward support at 153.97 and a break below will probably lead the currency lower to test 151.75, Citigroup technical analysts Tom Fitzpatrick in New York and Shyam Devani in London said in a note to clients.
Sterling fell 0.4 percent to 158.47 yen as of 1:31 p.m. in New York and declined 0.7 percent to $1.6451. The pound dropped 0.3 percent to 85.29 pence per euro. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast price changes in a security, commodity, currency or index.Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. A break above resistance or below support indicates a currency may move to the next level.
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