Dec. 14 (Bloomberg) -- The dollar's 1.1 percent advance against the yen this month may stall at 114.42, said George Davis, chief technical analyst at RBC Capital Markets, a unit of Canada's biggest bank in Toronto.

The daily stochastic oscillator chart shows the U.S. currency's gains are excessive, said Davis in a research note yesterday. The dollar's 14-day stochastic oscillator was 96 today, according to data compiled by Bloomberg. A level above 80 suggests the currency has climbed too fast.

``We note that the daily studies are locked at overbought extremes,'' Davis said. Stochastic oscillator charts measure the price of a security relative to its highs and lows during a particular period to try to predict a rise or fall.

The dollar traded at 112.45 yen as of 12:28 p.m. in Tokyo from 112.21 yen late in New York yesterday. It has fallen 5.5 percent versus the yen this year.

So-called resistance at 114.42 yen represents the upper boundary of a descending channel connecting the highs of July 9 and Oct. 15, based on Bloomberg data. A descending channel suggests a currency will trade lower as long as it doesn't break above the upper boundary.

``Overbought valuations suggest that the channel top at 114.42 will limit advances,'' Davis said.

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

To contact the reporter on this story: Ron Harui in Singapore at at rharui@bloomberg.net

Last Updated: December 13, 2007 22:30 EST