Dollar May Decline to 84 Yen, Bank of Tokyo-Mitsubishi UFJ Says

The dollar may fall to around 84 yen based on trading patterns, according to Masashi Hashimoto, a currency analyst at Bank of Tokyo-Mitsubishi UFJ Ltd. in Tokyo.

The currency may weaken to 84 yen on a decline below so- called support at the five-day moving average of 90.27 yen, Hashimoto said. The currency also may extend its 19 percent loss against the yen this year after a failure to rise above so- called resistance at the 21-day moving average of 91.59. The greenback triggered a triangle formation in December that targets the 84 yen level, he said.

“The 21-day moving average has been weighing on dollar-yen since yesterday, so it may break below” 90.27 yen, Hashimoto said. “The target of the triangle that had been triggered is around 84 yen.”

The dollar traded at 90.42 yen as of 2:05 p.m. in Tokyo from 90.38 yen late in New York yesterday. The 84 yen level was last traded in July 1995. The U.S. currency reached a record low of 79.75 yen in April 1995.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Resistance is where sell orders may be clustered, while support is where there may be buy orders.