Euro is heading for 13-month low of $1.25
THE euro may drop to a 13-month low below $1.25 should it pass certain technical relationships, currency analysts in Tokyo said.
A chart of the single currency shows its 20- and 90-week moving averages are falling toward the 200-week indicator, suggesting that what is known as a "dead cross" pattern will be created.
This occurs when a short-term average drops below a longer-term one and signals a currency is poised to extend losses, said Yoh Nihei, trading group manager at Tokai Tokyo Securities.
"The euro may dip below $1.30 and test lower prices," Mr Nihei said. "The euro is still in a downtrend."
The euro is trading around $1.35 after declining from last year's high of $1.5144 in November.
The currency slid 5.7pc against the dollar last quarter, the biggest three-month drop since September 2008.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Further falls in the euro would be welcome to Irish exporters, especially if they came against sterling as well as the dollar. The euro closed at 88.79p to the British currency on Friday, down from peaks of around 92p.
A weekend survey claimed that falling prices here and high inflation in the UK mean it is now cheaper to shop south of the Border than north.
Any further decline in the euro will increase that trend, which has already been boosted by the removal of VAT cuts in the UK.