Dollar May Rise to 79.36 Yen on Ichimoku Cloud Support, Commerzbank Says

The dollar may strengthen toward 79.36 yen should it remain above support levels indicated by ichimoku cloud analysis, Commerzbank AG said.

“Dollar-yen last week eased back towards its 55- and 100- day moving averages and recovered,” Karen Jones, head of fixed- income, commodity and currency technical analysis at Commerzbank in London, wrote in an e-mailed report today. Those levels were 77.05 and 77.17 respectively, according to Jones.

“The market remains underpinned by cloud support at 76.76 and 76.47,” she wrote. “We look for these supports to hold the downside and while above here, the market will remain well- placed for a retest of the four-year downtrend at 79.36.”

The dollar was little changed at 77.95 yen at 10:24 a.m. London time. It last reached 79.36 yen on Oct. 31 after Japanese authorities intervened to protect the nation’s exporters as the yen strengthened to a post-World War II low of 75.35.

Ichimoku charts are used to predict a currency’s direction by analyzing the midpoints of historical highs and lows. The conversion line plots the sum of the highest high and lowest low over the last nine trading days. The baseline is the same calculation over the past 26 days.

The cloud refers to the area between the first and second leading span lines on the chart and is used to show an area where buy orders may be clustered.

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: Keith Jenkins in London at Kjenkins3@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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