Yen May Test 3-Year Low on Decisive Break: Technical Analysis
The yen may depreciate to the weakest level in 41 months versus its U.S. counterpart as it approaches a key level of support, according to Credit Suisse Group AG, citing technical indicators.
A breach of the support at 90.25 to 90.84 yen to the dollar may push the Japanese currency to 95, Cilline Bain, a London- based technical analyst at Credit Suisse AG, wrote today in a client note. The yen last weakened to this level in August 2009.
Only a “decisive break” past the support zone “would allow the current upward trend to persist higher,” Bain wrote. He was not available for comment.
The yen depreciated 1.6 percent to 90.02 per dollar at 11:58 a.m. in New York, its biggest percentage move in a week.
If the yen is able to hold the support level from 90.24 to 90.84, it may appreciate through 87.80 to 85.54, according to Bain. That would be its strongest level since Dec. 27. Credit Suisse has a year-end forecast of 81 yen per dollar, according to data compiled by Bloomberg.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Support refers to an area where buy orders may be clustered.
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