By Matthew Brown Jan. 25 (Bloomberg) -- The dollar may resume its long-term decline because it failed to break through key resistance levels even after a two-month rally, JPMorgan Chase & Co. said. The Dollar Index, which InterContinental Exchange Inc. uses to gauge the strength of the greenback against a basket of six currencies, needs to break through 79.02, a 38.2 percent retracement of its decline to a 15-month low of 74.17 in November from 86.871 in April, to “seriously question” the currency’s long-term slide, wrote Niall O’Connor, a technical strategist in New York. The dollar has yet to break the equivalent level against the yen and the pound, while it has breached the so-called Fibonacci level against the euro. “Unless the mentioned key barriers and key support clusters in euro-dollar at $1.4000 and at $1.3750/30 are taken out the dollar is expected to at least attempt to resume its major downtrend shortly,” O’Connor said in a report dated Jan. 22 and received today. The U.S. currency needs to advance beyond 94.01 yen, while strengthening through $1.5749 or $1.5709 per pound would signal a reversal of the dollar’s decline, he said. The Dollar Index was little changed at 78.247 as of 3:56 p.m. in London. The U.S. currency strengthened 0.3 percent to 90.09 yen. It fell 0.1 percent to $1.4153 per euro, and fell 0.6 percent to $1.6206 per British pound. In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net

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