Oct. 22 (Bloomberg) -- The dollar may strengthen more than 5 percent against the yen after the U.S. currency exceeded its 200-day moving average, Morgan Stanley analysts said, citing trading patterns.
The dollar rose for an eighth day to 79.86 yen at 1:37 p.m. London time, the longest run of gains in seven years. The advance took it above the 200-day moving average, which was at 79.44 yen today, according to data compiled by Bloomberg.
“We expect the dollar-yen to extend gains further over the coming weeks and maintain our 84 target,” strategists led by Hans Redeker, the head of currency strategy in London, wrote in an e-mailed report today. “The yen is the weakest of the G-10 currencies.”
The last time the greenback traded above 84 yen was on March 21.
The U.S. currency rose 0.5 percent in the past month, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies. The yen fell 1.9 percent.
In technical analysis, investors study charts of trading patterns and prices to forecast changes in a bond, commodity, currency or index.
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