Singapore’s dollar will advance 0.9% to its strongest level since May 19 after the currency yesterday completed a “double bottom” against the greenback, according to Okasan Securities Co.

The currency slid to lows of $1.4208 on May 26 and $1.4212 on June 7, and yesterday broke above the highest level between those bottoms of $1.3965, a “bullish signal,” according to Tsutomu Soma, a bond and currency dealer at Okasan. Soma predicts the Singapore dollar will climb to $1.3864, citing a Fibonacci chart that is based on a sequence of numbers.

“Sentiment for the Singapore dollar seems to have turned better,” Tokyo-based Soma said. “The favourable sentiment may last at least for this month, pushing the Singapore dollar higher from here.”

The currency traded at $1.3985 against the US dollar as of 8.21 a.m. in Singapore, according to data compiled by Bloomberg.

Soma forecasts the Singapore dollar will first reach $1.3930 before taking out $1.3864, the strongest level since May 19, in two weeks.

The currency slid from $1.3649 on April 30 to $1.4212 on June 7, with $1.3930 representing a 50% rebound of that decline and $1.3864 being a 61.8% reversal.

Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. Other Fibonacci points are 23.6%, 38.2 and 76.4%.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.