NEW YORK (Bloomberg) — The British pound may gain more than 10 percent against the dollar, Citigroup Global Markets Inc. said, citing charts used to predict currency movements.

A rally from near the 76.4 percent Fibonacci retracement of the pound's climb from $1.4557 to $1.5249 between November 13 and 19 may indicate "daily momentum is turning up," wrote New York- based Tom Fitzpatrick and London-based Shyam Devani. "In addition, an argument could be made for having completed a five- wave sequence lower from the $1.8648 area," they wrote, referring to the Elliot Wave Theory.

"We could be setting the platform for a reasonably decent equity rally, albeit a bear market rally," Fitzpatrick said in a telephone interview. "You're going to see people react to that on the risk trades and the dollar trades and that could give you a fairly decent bounce in the pound."

Investors should target a gain in the pound to $1.5950 and possibly to $1.67, Fitzpatrick and Devani wrote in a research note dated November 24. They should exit the trade if the currency weakens to $1.4698, Citigroup said.

British Prime Minister Gordon Brown yesterday pledged a £25.6 billion ($38.8 billion) package, in the biggest round of tax cuts and spending increases in two decades, to counter the UK's first recession since 1991.

US stocks posted the biggest two-day rally since 1987 on Monday after the US government guaranteed $306 billion of troubled Citigroup Inc. assets and lawmakers pledged to pass another economic stimulus package.

Fibonacci analysis uses a mathematical formula based on the theory that prices rise or fall by certain percentages after reaching a high or low. A break of one indicates a currency may move to the next. A failure suggests a trend may stall. Other Fibonacci points include 50 percent and 61.8 percent.