Singapore’s dollar may weaken 2.7% against the Thai baht over the next month after a short- term moving average on a technical chart crossed a longer-term line, according to Tokyo-based Okasan Securities Co.

Singapore’s currency may fall to 23.1798 versus the baht in a week, 23.0134 in two to three weeks and 22.7445 in a month, Tsutomu Soma, a bond and foreign-exchange dealer at Okasan, said in an interview. He cited 10- and 20-day averages and a series of numbers known as the Fibonacci sequence for his forecast.

 

The 10-day average, at 23.57 today, dropped below the 20- day line at 23.61 to form a “dead-cross” pattern, a bearish signal for the Singapore dollar, according to Tokyo-based Soma. The currency has also traded below its 200-day moving average this week, suggesting further declines, he said.

 

“The Singapore dollar weakened through quite a crucial technical point,” Soma said. “That indicates Singapore’s currency will be on a clear downtrend against the baht.”

 

The city-state’s dollar gained 0.1% to 23.3840 against the baht as of 2:28 p.m. local time, according to data compiled by Bloomberg. It reached 23.3088 yesterday, the lowest level since July 6.

 

Soma’s forecast of 23.1798 is a 61.8% retracement of the Singapore dollar’s gain from a May 20 low of 22.7445, the weakest level since March 2008, to a seven-month high of 23.8839 reached on Aug. 2, according to the Fibonacci chart. The next target of 23.0134 is a 76.4% reversal and 22.7445 is a full retracement.

 

Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.