Euro May Extend Losses to as Low as $1.25: Technical Analysis

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The euro may extend its decline to $1.25 after dropping below the March 30 low of $1.3114, said Sumitomo Trust & Banking Co., Japan’s fifth-largest bank.

The $1.3114 level is so-called support on a horizontal trend line of a descending triangle, said Akifumi Uchida, deputy general manager of the marketing unit in Tokyo at Sumitomo Trust & Banking. The trend line connects the March 30 low and the April 9 low, based on data compiled by Bloomberg. A descending triangle consists of horizontal and descending trend lines.

“The euro is weakening and is likely to go below $1.30,” Uchida said. “The currency has broken out of the triangle to the downside.”

Europe’s single currency declined to $1.3137 at 1:35 p.m. in Tokyo from $1.3169 in New York yesterday. It touched $1.3090, the weakest level since March 18. The euro fell 2.7 percent this week, the most since the first week of the year. The $1.25 level was last seen on March 5.

From Bloomberg News.