The dollar may gain 11 percent against the yen in the next three months should it rise above so-called resistance at 94.63 yen, based on trading patterns, Standard Chartered Plc said. in Singapore.
The 94.63 yen level would match the greenback’s highest this year, reached Jan. 6, as well as creating potential for a so-called double bottom on a daily chart using 13-week moving averages, Callum Henderson, head of global currency strategy at Standard Chartered in Singapore, wrote in a note to clients. A double bottom forms when a currency makes two successive troughs of similar depth, indicating potential for it to rebound.
“Recent chart activity does suggest buyers are active above the 87 double lows from December 2008 and January,” Henderson wrote. “The 89.60 level just below this has marked dollar buying when reached and if this continues to be the case over the coming sessions then the double bottom pattern should continue to unfold, with extension targets pointing to 102.20.”
The dollar fell to 92.23 yen as of 12:54 p.m. in Tokyo from 92.41 yen late in New York yesterday. The currency touched a 13- year low of 87.13 on Jan. 21. The yen strengthened versus 13 of the 16 most-active currencies today on concern stock declines will spur investors to sell higher-yielding assets they bought with funds from Japan.
“The dollar is expected to trend higher over the next three months toward 101 and higher,” Henderson wrote. Investors may benefit if they exit trades betting on U.S. dollar declines and buy the greenback any time it falls toward the support level of 90.30 yen, he said.
From Bloomberg News.
The 94.63 yen level would match the greenback’s highest this year, reached Jan. 6, as well as creating potential for a so-called double bottom on a daily chart using 13-week moving averages, Callum Henderson, head of global currency strategy at Standard Chartered in Singapore, wrote in a note to clients. A double bottom forms when a currency makes two successive troughs of similar depth, indicating potential for it to rebound.
“Recent chart activity does suggest buyers are active above the 87 double lows from December 2008 and January,” Henderson wrote. “The 89.60 level just below this has marked dollar buying when reached and if this continues to be the case over the coming sessions then the double bottom pattern should continue to unfold, with extension targets pointing to 102.20.”
The dollar fell to 92.23 yen as of 12:54 p.m. in Tokyo from 92.41 yen late in New York yesterday. The currency touched a 13- year low of 87.13 on Jan. 21. The yen strengthened versus 13 of the 16 most-active currencies today on concern stock declines will spur investors to sell higher-yielding assets they bought with funds from Japan.
“The dollar is expected to trend higher over the next three months toward 101 and higher,” Henderson wrote. Investors may benefit if they exit trades betting on U.S. dollar declines and buy the greenback any time it falls toward the support level of 90.30 yen, he said.
From Bloomberg News.