* Euro breaks key resistance level vs dollar
* Euro/sterling surge spills over to euro/dollar pair (Recasts, updates prices, adds quote, changes byline, dateline, previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Sept 28 (Reuters) - The euro surged to a fresh five-month high against the dollar on Tuesday after data showed U.S. single-family home prices slid in July, prompting the euro zone single currency to rise above a key resistance level that signaled further euro gains.
Analysts said gains in euro/sterling had also helped the euro advance against the dollar. The euro surged against sterling after Bank of England policymaker Adam Posen said the British central bank should start pumping more money into the economy. For more see [ID:nLAC005768].
For story on S&P/Case-Shiller home price index click on [ID:nN28171424].
The euro broke key resistance above $1.3511, the 50 percent
Fibonacci retracement of its fall from $1.5145 last November to
its June low around $1.1876. The euro
Against sterling, the euro rose to around 85.59 pence from
around 84.92 pence
According to CitiFX, the next stop in euro/dollar is the 55-week moving average which comes in at $1.3630. the bank said there is solid resistance above that level, specifically at $1.3670-$1.3740 where the highs from December 2004, April 2007, and March 2009 converge.
Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey, said over the medium term he's looking for a rise in the euro to between $1.38 and $1.39.
"There are a few stopping points in between ($1.35 to $1.38) but it could easily happen over the next few days as the euro has gained nearly 5 percent over the last week or so. The euro is the standout here." (Additional reporting by Steven C. Johnson; Editing by James Dalgleish)