The dollar may rise to an eight-week high against the yen, according to the Bank of Tokyo-Mitsubishi UFJ Ltd., citing trading patterns.
The greenback was at 78.81 yen as of 10:34 a.m. in Tokyo, close to the upper end of its daily Bollinger band at 78.86. The currency also traded near the higher end of its ichimoku-cloud at 78.90.
“The dollar-yen is struggling with the upper limits of the Bollinger band and ichimoku cloud at around 79,” said Teppei Ino, an analyst in Tokyo at Mitsubishi UFJ, a unit of Japan’s biggest financial group by market value. “Once the pair climbs above these levels, it’s likely to proceed to the middle of the 79-80 range.”
The dollar may advance to its 200-day moving average of 79.39, Ino forecast. The currency hasn’t reached that level since Aug. 21.
Bollinger bands display a candle chart of historical prices and show standard deviation-based ranges around a specified moving average.
Ichimoku analysis is used to predict a currency’s direction through analyzing the midpoints of historical highs and lows. 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 to forecast changes in a security, commodity, currency or index.