Yen Tests 4-Month High on Retrace, BofA Says: Technical AnalysisJoseph Ciolli
The yen may climb to its strongest level in almost four months versus the dollar as it retraces a decline that saw it reach a 4 1/2-year low, according to Bank of America Corp.
The yen will stay bullish as it passes through the area from 93.65 to 93.15 before strengthening to 90.91, according to MacNeil Curry, chief rates and currencies technical strategist in New York at Bank of America Merrill Lynch. That would be the yen’s highest level since reaching a monthly peak of 90.88 on Feb. 25.
“Bigger picture, we are in a multi-month 91-to-104 area range trade,” Curry wrote today in a note to clients. The Japanese currency slid as far as 103.74 on May 22, its weakest level since October 2008.
The yen increased 0.3 percent to 95.01 per dollar at 10:39 a.m. in New York.
Curry made a bullish yen trade recommendation on June 14, suggesting that traders sell the dollar against the yen with a target of 91. Bank of American forecasts that Japan’s currency will decline to 105 by year-end.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Resistance refers to an area on a chart where sell orders may be clustered, and support is an area where there may be buy orders.