Dollar’s Upward Bias Against Yen Is Intact: Technical Analysis
The dollar may resume its advance against the yen as potential short-term gains in the Japanese currency provide opportunities to sell it, JPMorgan Chase & Co. said, citing trading patterns.
The focus for the greenback is the key resistance from 99.70 yen to 101.45, an area that contains the 50 percent retracement of the currency’s drop from the 2007 “cycle high” and the 2009 peak,Niall O’Connor, a technical analyst at JPMorgan, wrote in a research note to clients yesterday. Deeper targets start from the 102.35 area, the 76.4 percent retracement from the 2008 high, he wrote.
“The overall upside bias is intact” for the dollar versus the yen, O’Connor wrote. While the pullback in dollar-yen earlier this week “highlights the importance of the next line of key targets, there remains little evidence of a sustained reversal at this point,” he wrote.
The yen was little changed at 99.01 per dollar as of 11:05 a.m. in Tokyo from yesterday, when it touched 99.66, the weakest level since May 2009.
Fibonacci analysis is based on a theory that prices rise or fall by certain percentages after reaching a high or low. Key percentage levels include 23.6, 38.2, 50, 61.8 and 76.4. Resistance refers to an area on a chart where analysts anticipate orders to sell may be clustered.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.
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