By Candice Zachariahs Dec. 22 (Bloomberg) -- The Australian dollar may slide to its weakest since September after forming a “head-and- shoulders” pattern that signals further declines, UBS AG said, citing trading charts. The currency’s decline through so-called neck-line support from the Nov. 27 low to the Nov. 2 low, “confirms a head-and- shoulders stop formation that projects down to the 84.10-cent area,” James Chorek, director of global technical strategy at UBS in Stamford, Connecticut, wrote in a note to clients yesterday. “Initial small support is at 86.04 cents.” Australia’s currency fell 0.2 percent to 87.99 U.S. cents as of 10:51 a.m. in Sydney and touched its weakest since Oct. 6. The so-called Aussie dollar last traded near 84.10 cents on Sept. 4. A head-and-shoulders pattern occurs when a currency makes three consecutive peaks on a chart, with the middle being the highest. A neckline is a line drawn across the base, the lower boundary of the trading range that, when crossed, typically signals a move lower. 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 reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

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