The euro may weaken to as low as $1.3088 should it break below a key support level against the U.S. currency, Commerzbank AG said, citing technical indicators. “Euro-dollar sold off at the end of last week,” Karen Jones, head of fixed-income, commodity and currency technical analysis at Commerzbank in London, wrote in an e-mailed report today. “We suspect that this market has topped near-term just ahead of much tougher resistance at $1.3978 and $1.40.” The first level represents the 78.6 percent Fibonacci retracement of the euro’s decline against the dollar from Nov. 4 to Jan. 10, while $1.40 is a psychological resistance level, Jones said in a telephone interview. “A close below the Jan. 31 low at $1.3571 will confirm the move lower and leave the market under pressure to sell off to the 55-day moving average at $1.3326, then the 200-day moving average at $1.3088,” Jones said. The euro fell 0.1 percent to $1.3572 as of 10:38 a.m. in London. A support level is an area on a chart where technical analysts anticipate orders to buy a currency and its related instruments. The stronger the support, the more selling is needed for a drop below that level. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. To contact the reporter on this story: Keith Jenkins in London at Kjenkins3@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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