Technical analysts at Bank of America Merrill Lynch believe that the single currency’s slide seen during the last months brought it the through key levels on the Ichimoku Chart. According to them, there are strong chances that euro falls to $1.25 in the first half of 2011.

The pair EUR/USD climbed from the 4-year minimum at $1.1877 on June 7 to the 9-month maximum at $1.4282 on November 4. Then it broke below the bottom of an Ichimoku Cloud at $1.3374, while its shorter-term conversion line crossed down its longer-term baseline. In addition, the rate of the European currency also went below the 50% Fibonacci retracement of the mentioned advance from June to November at $1.3080.

The specialists underline that the momentum is now definitely downward, so the descending trend is going to continue at least during the next several quarters. Bank of America Merrill Lynch expects that the single currency is targeting the $1.2796 (61.8% Fibonacci retracement) and $1.2445 (76.4% retracement).



Chart. Daily EUR/USD

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