By Ron Harui
Nov. 11 (Bloomberg) -- The dollar may fall to 96.85 yen as soon as this week, according to an Elliott Wave chart that predicts price movements, said Andrew Chaveriat, a technical analyst at BNP Paribas SA in New York.
The chart shows the U.S. currency has begun a third wave, where the dollar may fall against the yen, wrote Chaveriat in a research report yesterday. Support at 96.85 yen is a 38.2 percent Fibonacci retracement of the dollar's climb from the Oct. 24 low of 90.93 yen to the Nov. 4 high of 100.55 yen. Support is where buy orders may be clustered.
``The meandering pullback off 100.55 implies a correction is developing,'' wrote Chaveriat. ``We expect it will reach 96.85, but probably not much below 95.75,'' which is the 50 percent retracement level, he said.
The dollar traded at 97.85 yen as of 2:45 p.m. in Tokyo from 98.00 yen late in New York yesterday. It reached 90.93 yen on Oct. 24, the lowest since August 1995.
Elliott Wave Theory, created by Ralph Elliott in 1938, attempts to predict future price moves by dividing past moves into sections, or waves, and calculating changes in value.
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.
To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net
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