The euro may climb to its highest level versus the dollar this year should it rise above resistance between $1.4519 and $1.4578, said Pak Lai Ng, a technical analyst at Forecast Pte in Singapore. The $1.4519 level is the 61.8 percent Fibonacci retracement of the 17-nation currency’s decline from this year’s high of $1.4940 reached on May 4 to a four-month low of $1.3837 marked on July 12, data compiled by Bloomberg show. The level of $1.4578 was the currency’s high in July. Daily momentum indicators such as the moving average convergence/divergence, or MACD, suggest the euro will rise, according to Ng. “It needs to break the July 4 high, then the focus will be back to the May high,” Ng said. “If you look at the overall long-term picture, it’s still up.” The euro traded at $1.4257 as of 8:06 a.m. in Tokyo from $1.4250 in New York yesterday. The MACD for the euro was 0.0003 today, above the so-called signal line of -0.0003, according to Bloomberg data. A reading above the signal line indicates the currency will strengthen. 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 it may move to the next level. Support refers to an areas where buy orders may clustered. Resistance is where there may be orders to sell. MACD is a gauge of momentum and is calculated by subtracting the 26-day exponential moving average from the 12- day average. The signal line is a nine-day exponential moving average of the MACD, and provides buy and sell signals. In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. To contact the reporter on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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