A weakening in the yen past the key psychological support level of 100 per dollar will likely see it extend losses to 101.25, IG Markets Securities Ltd. said, citing trading patterns.
A monthly chart shows the yen halted its decline to 101.25 in November 1999 before again meeting resistance around that level in January 2005. The yen rose 0.3 percent to 99.38 against the dollar as of 8:06 a.m. in London. It yesterday touched 99.95, the weakest since April 14, 2009, when it last traded at 100.
“You can draw a pretty clean horizontal line from the end of 1999,” said Junichi Ishikawa, a market analyst at IG in Tokyo. “Yen crosses have been firm, so it’s possible that if the yen breaks support at 100, it’ll weaken further, targeting that 101.25 level.”
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. Support and resistance refer to areas on a chart where analysts anticipate orders to buy or sell may be clustered.
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