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Pound May Extend Decline to $1.8300 in Two Weeks, Forecast Says

By Ron Harui

Aug. 25 (Bloomberg) -- The British pound may extend its decline to$1.8300 in the next two weeks after the currency closed on Aug. 22below so-called support at $1.8620, said Pak Lai Ng, a technical analyst at Forecast Pte Ltd. in Singapore.

Support at $1.8620 was a 61.8 percent retracement of the pound'srise from the November 2005 low of $1.7049 to the November 2007high of $2.1161, based on a series of numbers known as the Fibonacci sequence. Support is where buy orders may be clustered.

The pound is extending the big move down from November,'' Ngsaid. ``The move looks pretty impulsive.''

The pound fell to $1.8438 at 1:30 p.m. in Tokyo from $1.8527 in NewYork on Aug. 22. It reached $1.8413, the lowest since July 26,2006. The currency has dropped 13 percent since touching a 261/2-year high of $2.1161 on Nov. 9.

The $1.8300 level is a 38.2 percent Fibonacci retracement of thecurrency's advance from the June 2001 low of $1.3682 to theNovember 2007 high, according to Ng.

Momentum indicators such as the stochastic oscillator chart signalthe pound may continue to weaken even as they show the currency is``a bit oversold,'' Ng said. ``It could stay oversold for a longtime.''