March 1 (Bloomberg) -- The yen may revisit the lowest level since May 2010 reached earlier this week if a key so-called support level fails to hold, according to JPMorgan Chase & Co.
The Japanese currency will face a test at 93.84 per dollar, according to Niall O’Connor, a technical analyst at JPMorgan in New York. The yen may depreciate to 94.77, the almost three-year low it reached on Feb. 25, if it breaches that support level, O’Connor said. The currency gained 1.7 percent on Feb. 25, its biggest advance since March 2011.
“On a medium-term scale, there’s not enough right now to suggest that the overall uptrend in dollar-yen is over,” O’Connor said in a telephone interview.
The yen declined 1.1 percent to 93.57 per dollar at 1:19 p.m. in New York after reaching 93.68. The currency slid 0.9 percent to 121.90 per euro.
Japan’s currency may strengthen to 88.77, its highest level in five weeks, if it breaks a key level of resistance at 90.25, according to O’Connor.
The yen strengthened 0.9 percent over the past week among the 10 developed-nation currencies monitored by the Bloomberg Correlation-Weighted Indexes. The dollar gained 1 percent, while Norway’s krone dropped 0.6 percent and the euro fell 0.4 percent.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, currency or index. Resistance refers to an area on a chart where sell orders may be gathered, and support is an area where there may be buy orders.
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