The dollar is likely to gain against the yen toward the highest since May 2010, UBS AG. said, citing trading patterns.
“With the bullish trend indicators in place,” the U.S. currency is likely to target 94.134 yen, the 38 percent retracement on the Fibonacci chart from the June 2007 high of 124.14 to the postwar low of 75.35 reached in October 2011, Richard Adcock, a technical strategist at UBS in London, wrote, citing a theory that prices rise or fall by certain percentages after reaching a new high or a low. The 94.134 level was last reached on May 5, 2010, according to data compiled by Bloomberg.
The greenback is supported above the Jan. 16 low of 87.79 yen, Adcock wrote in a report today, adding that UBS remains “long” on the U.S. dollar. “Any setback appears to be limited in time and extent,” he said.
The dollar fell 0.4 percent to 89.22 yen as of 6:44 a.m. in London from yesterday, when it touched 90.25 the highest since June 23, 2010.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. Support refers to an area on a chart where analysts anticipate orders to buy may be clustered.