The euro may appreciate to $1.38, rising above the 200-day moving average of $1.3497, after yesterday’s “bullish key day,” Citigroup Inc. said in a report charting technical trading patterns. The 16-nation currency erased losses yesterday and closed above the previous day’s high, breaking above so-called “trend resistance,” Tom Fitzpatrick in New York and Shyam Devani in London wrote today in the note. The euro gained 5 percent in the two days following a previous key day on March 17 and advanced 1.8 percent in the same period after April 22, the chart shows. “Euro-dollar turned aggressively on an intraday basis and posted a bullish key day up,” the technical analysts said in the report. “The last two times this happened, euro-dollar was significantly higher within the next 48 hours.” The euro fell 0.2 percent $1.3377 today in New York, holding close to the highest in a month, compared with $1.3406 yesterday. The trade-weighted Dollar Index declined 0.15 percent to 83.844. It may fall further should it breach support at 83.6 from the 76.4 percent Fibonacci retracement and the rising trend from its July low, the Citigroup technical analysts wrote. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. Trend lines are paths traders draw on charts based on a currency’s peaks and troughs, defining a channel within which gains and declines occur. A break above resistance or below support indicates a currency may move to the next level.

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