July 7 (Bloomberg) -- The euro may fall to a three-week low against the dollar within the next two weeks after the currency dropped below so-called support around $1.4075, according to Bank of Tokyo-Mitsubishi UFJ Ltd., citing trading patterns. Support at $1.4075 represents an ascending trend line that connects the lows of April 22 and 28, June 23 and July 2, based on the bank’s chart. Other technical indicators such as the ichimoku and moving average convergence/divergence charts also show sell signals for the euro against the dollar, said Masashi Hashimoto, a currency analyst at Bank of Tokyo-Mitsubishi UFJ in Tokyo. Support is a level where buy orders may be clustered. “It’s important that the euro broke below the support line,” Hashimoto said in an interview. “There is scope for the currency to weaken to the June 16 low of $1.3748.” The euro declined to $1.3916 at 8:25 a.m. in London from $1.3984 in New York yesterday, when it slid to $1.3877, the lowest since June 23. The euro has weakened 0.8 percent versus the greenback this month, following a 0.9 percent drop in June. The European currency also has failed to strengthen above so-called resistance at the 21-day moving average of $1.3983 since July 3, and the five-day moving average of $1.4028 is currently in a downtrend, Hashimoto said. Resistance is where there may be sell orders. An ichimoku chart analyzes the midpoints of historic highs and lows. MACD charts can indicate whether a price shift is a change in trend or a short-term deviation by comparing moving averages based on nine-, 12- and 26-day periods. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.

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