(Bloomberg) -- A rally by the euro through the level of $1.4622 per U.S. dollar would suggest that the greenback’s “medium-term downtrend has resumed,” according to Citigroup Inc. The 16-nation European currency breached $1.4509 yesterday on an intraday basis, indicating the currency is “attempting to push through the trend across the highs,” technical analysts Tom Fitzpatrick in New York and Shyam Devani in London wrote in a note to clients today.The level of $1.4622 is “near-term resistance” above $1.4509 for the euro, the upper boundary of a trading range where sell orders may be clustered, and represents the 61.8 percent retracement in Fibonacci analysis, the Citigroup analysts wrote. Fibonacci analysis is based on the theory that securities tend to rise or fall by specific percentages after reaching a new high or low.
The euro rose 0.7 percent to $1.4575 at 11:33 a.m. in New York, from $1.4478 yesterday. It touched $1.4601, the strongest level since Dec. 18, when it reached $1.4720, the starting point for Citigroup’s Fibonacci retracement calculations. Technical analysis is the study of trading patterns for signals that may foreshadow price changes in a security, commodity, currency or index.
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