Dollar May Reach 104.43 Yen on Break of 105, Forecast's Ng Says

By Stanley White

July 1 (Bloomberg) -- The dollar may fall to 105 yen this week provided it remains below 107.11 yen, according to Pak Lai Ng, a technical analyst at Forecast Singapore Pte.

The U.S. currency is poised to decline as its daily moving average convergence/divergence chart is showing a sell signal, Ng said. The dollar may fall to its June 9 low of 104.43 yen next week on a break of first support, he said. First support at 105 yen is near yesterday's low. So-called resistance at 107.11 yen is the dollar's June 23 low, where sell orders may be clustered. Support is a price where traders may buy.

``As long as the dollar remains below 107.11 yen, then the bias is to the downside,'' Ng said. ``Momentum indicators including MACD aren't looking good.''

The dollar traded at 106.29 yen at 11:23 a.m. in Tokyo from 106.21 late yesterday. The U.S. currency rose 6.5 percent last quarter, the biggest advance since the last three months of 2001.

MACD charts indicate whether a price shift is a change in trend or a short-term deviation by comparing moving averages based on nine-, 12- and 26-day periods.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.

To contact the reporter on this story: Stanley White in Tokyo at swhite28@bloomberg.net