The dollar will probably stay in a one-yen range as investors look for policy signals from the U.S. Federal Reserve later this week, IG Markets Securities Ltd. said, citing trading patterns.
The U.S. currency has traded between a support level at about 78.15 yen and the upper end of its daily ichimoku cloud of 79.14 yen this month, according to Junichi Ishikawa, a Tokyo- based analyst at IG Markets. Fed Chairman Ben S. Bernanke will speak in Jackson Hole, Wyoming on Aug. 31.
“Before the Fed event, the dollar doesn’t have enough power to break the range,” Ishikawa said. “You may have to wait until September to see moves to the upside or downside.”
The dollar slid 0.2 percent to 78.55 yen at 12:03 p.m. in Tokyo today, ending a two-day gain. Support refers to an area where analysts anticipate orders to buy a currency.
Ichimoku charts are used to predict a currency’s direction by analyzing the midpoints of historical highs and lows. The so- called cloud refers to the area between the first and second leading span lines and is used to show an area where buy orders 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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