BLBG:Euro to Advance Against Forint, Lloyds Says: Technical Analysis
The euro may advance against the Hungarian forint as the 17-nation European currency rallies based on technical levels, according to Lloyds Banking Group Plc, citing ichimoku cloud chart analysis.
“So long as the support holds at the end of the week, the trend should resume for at least one more week,” Tim McCullough, a technical strategist at Lloyds in London, wrote in an e-mailed report. “The rally has experienced increased volatility in the last two months.”
McCullough said the same exhaustion patterns showing the end of the current decline in the ichimoku chart signaled the end of the Jan. 5 peak. The peak marked the end of a nearly six month climb from 261.88.
The euro declined 0.4 percent to 303.80 forints at 2:20 p.m in New York, falling for the third straight day. It touched as low as 301.67 forints, the least in almost a month.
McCullough said he suggests a stop-loss order at 300.18 euros per forint to protect investors if the market moves against the trade.
Ichimoku charts are used to predict a currency’s direction by analyzing the midpoints of historical highs and lows. The conversion line plots the sum of the highest high and lowest low during the past nine trading days. The baseline is the same calculation during the past 26 days.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.
To contact the reporter on this story: Austen Sherman in New York at asherman18@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
