The euro yesterday dropped below $1.4670, which represents the currency's 55-day moving average and is an area where buy orders are likely to be placed. The next target of $1.4310 was the previous lower range of euro-dollar levels in December.
``The fall through the 55-day moving average adds further strength to the bearish outlook here and opens the way for the pair to fall to the base of the range at $1.4310 in the short term,'' analysts led by New York-based global head of currency strategy Tom Fitzpatrick wrote in a research note yesterday.
The 15-nation currency was at $1.4639 per dollar at 10:12 a.m. in Tokyo, from $1.4647 late yesterday in New York. It fell to $1.4311 on Dec. 20, and last dropped below $1.4310 on Oct. 25.
The euro yesterday fell below the 55-day moving average, at $1.4665 today, for the first time since early September. That signaled the euro is likely to remain weak in the short term.
Traders often look for signs of a currency's short-term trend by viewing the five-day moving average, and forecast longer-term trends with the 21-day and 55-day moving average. They use moving averages to identify levels of support, where buying is expected, or resistance, where selling is forecast.
read more:Euro May Weaken to $1.4310 on Technical Charts, Citigroup Says
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