By Yoshiaki Nohara and Kazumi Miura March 12 (Bloomberg) -- The euro may rise to a five-week high against the yen after breaking through a key level of resistance, Ueda Harlow Ltd. said. The 16-nation currency is in an uptrend after climbing above the “baseline” of an ichimoku chart, said Toshiya Yamauchi, manager of currency margin trading at Ueda Harlow in Tokyo. Resistance refers to an area where sell orders may be clustered. The euro also advanced above its 21-day moving average, gaining upward momentum, Yamauchi said. “I expect the euro to rebound in the short term,” Yamauchi said yesterday. “The euro recently dipped below 120, but its loss was limited.” The currency is set to test resistance at 125.28 yen, Yamauchi said. That level represents a 38.2 percent Fibonacci retracement of the currency’s decline from 134.38 yen on Jan. 11 to 119.66 yen on Feb. 25, the lowest in a year. The euro traded at 123.79 yen at 7:33 a.m. in Tokyo. “If the euro breaks that level, it may try to advance above 126 yen,” Yamauchi said. That level is near the lower end of the ichimoku cloud, he said. The last time the euro traded above 126 was Feb. 4. An ichimoku chart analyzes the midpoints of historic highs and lows. The baseline is the sum of the highest high and the lowest low over the past 26 trading days. Fibonacci analysis is based on a theory that prices rise or fall by certain percentages after reaching a high or low. A break above resistance, or below support, indicates a currency may move to the next level. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Kazumi Miura in Tokyo at Kmiura1@bloomberg.net.

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