Already a Bloomberg.com user?
Sign in with the same account.
The dollar may extend gains and touch 94 yen for the first time in more than two years after crossing a key retracement level on the Fibonacci chart, according to JPMorgan Chase & Co.
The greenback is likely to test the range of 93.95 to 94 yen, the 38.2 percent Fibonacci retracement of the currency’s slide from its “cycle peak” in 2007, Niall O’Connor, a technical analyst at JPMorgan Securities, wrote in a research note to clients yesterday. The dollar last month climbed above its 23.6 percent retracement of the June 2007 high of 124.14 to the postwar low of 75.35 set in October 2011, according to data compiled by Bloomberg.
“The overall upside bias remains intact,” O’Connor wrote. “A test of the critical 93.95/94 area” seems likely.
The yen rose 0.1 percent to 92.33 per dollar as of 1:50 p.m. in Tokyo from yesterday, when it weakened to as much as 93.18, the lowest since May 2010. The yen has lost 6.8 percent this year, the biggest loser among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.
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.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.
To contact the reporter on this story: Naoto Hosoda in Tokyo at firstname.lastname@example.org
To contact the editor responsible for this story: Rocky Swift at email@example.com