By Ron Harui and Shigeki Nozawa
June 23 (Bloomberg) -- The dollar may decline to a four- month low of 90 yen should the U.S. currency drop below so- called support between 93.86 and 95 yen, according to Mizuho Corporate Bank Ltd.
Support for the dollar at 95 yen is “psychological” and that at 93.86 yen represents the U.S. currency’s low on May 22, said Hiroyuki Tanaka, chief technical analyst at Mizuho Corporate Bank in Tokyo. Another support level is 94.29 yen, the base line of the weekly ichimoku chart, Tanaka said. Support is a level where buy orders may be clustered and ichimoku charts analyze the midpoints of highs and lows.
“The 95-yen level is the psychologically important turning point” for the U.S. currency, Tanaka said today in a Bloomberg News interview.
The dollar weakened to 95.18 yen as of 6:42 a.m. in London from 95.87 yen in New York yesterday. It earlier dropped to 95.12, the lowest level since June 1. The 90 yen level was last seen on Feb. 12.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast price changes in a security, commodity, currency or index. Moving averages are used to identify trends and find support or resistance.
To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net; Shigeki Nozawa in Tokyo at Snozawa1@bloomberg.net.
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