The U.S. dollar may decline toward the weakest level in eight months versus its Canadian counterpart after dropping to a fresh low for this year, Royal Bank of Canada said, citing trading patterns.
The greenback slid below 98.42 Canadian cents, the previous 2012 low reached on March 1, and fell to 98.23 cents on April 25, according to data compiled by Bloomberg. It set a new year-low at 98 cents on April 27, the data show.
The decline “has resolved a multi-month trading range to the downside, exposing the August 31, 2011 low,” George Davis, chief technical analyst for fixed-income and currency strategy at the bank’s RBC Capital Markets unit, wrote in a report yesterday. “This development confirms that bearish sentiment still remains prevalent” for the dollar versus the so-called loonie, he wrote.
The U.S. currency was gained 0.1 percent at 98.80 Canadian cents at 9:28 a.m. in Tokyo after rising 0.7 percent to 98.72 yesterday. It dropped to as low as 97.25 cents on Aug. 31, according to data compiled by Bloomberg.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, currency or index.