Dollar May Test 1995 Low Under 80 Yen, Commerzbank Technical Analysis Says
Sept. 10 (Bloomberg) -- Bhanu Baweja, global head of emerging markets fixed income, currency and credit research at UBS AG, talks about the Japanese yen and the Chinese yuan. He speaks with Bloomberg's Andrea Catherwood on Bloomberg Television's "The Pulse." (Source: Bloomberg)
Sept. 10 (Bloomberg) -- Curtis Freeze, chief executive officer of Gro-Bels Co., a Tokyo-based property developer, and chairman of Honolulu-based Prospect Asset Management Inc., talks about Japan's economy and the yen. Japan’s economy slowed less than initially estimated in the second quarter as companies boosted capital spending, indicating the nation’s recovery was intact before a surge in the yen threatened to stunt export gains. Freeze talks with Linzie Janis from Tokyo on Bloomberg Television's "Global Connection." (Source: Bloomberg)
The dollar may weaken to 80 yen, approaching its postwar low, should it drop below a key level, Commerzbank AG said, citing technical indicators.
“Dollar-yen remains under pressure and we are still on course to test 82.82, the 2008-2010 support line,” Axel Rudolph, a senior technical analyst at Commerzbank in London, wrote in an e-mailed report today. “We regard this as the last defence” before the currency approaches its post-1945 record level below 80 yen, he wrote.
According to Bloomberg data, the dollar weakened to 79.75 yen on April 19, 1995. The U.S. currency depreciated 0.1 percent to 84.06 yen today as of 1:59 p.m. in London.
“With the dollar being weak and the yen staying strong, the trend is clearly in place,” Rudolph said in a telephone interview. “Last week’s low around 83.34 is being eyed, and there’s scope for a slide to 80 yen over the medium term.”
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, currency or index. A support level is an area on a chart where analysts anticipate orders to buy a currency to be grouped and a resistance level is an area where they anticipate sell orders to be clustered.
To contact the reporter on this story: Keith Jenkins in London at Kjenkins3@bloomberg.net
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